US House Passes Central American Trade Pact
The United States House of Representatives  voted late Wednesday to ratify the Central American Free Trade Agreement, handing President Bush a hard-fought victory on a measure with limited economic effects but large political consequences.

CAFTA, approved 217 to 215 after about three hours of contentious debate and a roll call that lasted longer than an hour, will remove most trade barriers between the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

The trade pact was approved by the Senate last month, 54 to 45. Most of its provisions take effect immediately; the rest will be phased in over 20 years.

The late-night House vote capped weeks of high-pressure lobbying and deal-making by Bush administration officials, Republican leaders in Congress and outside business groups who viewed CAFTA's approval as essential to advancing U.S. commercial interests, foreign policy goals and GOP political objectives.

"CAFTA is a little trade agreement with small economic consequences for our country," Rep. Jim Kolbe (R-Ariz.) said shortly before the roll was called. "But it is a huge national security issue with enormous implications for our entire foreign policy."

The measure was fiercely opposed by most congressional Democrats and some Republicans who considered its labor and environmental provisions lacking and who saw the pact as emblematic of problems associated with globalization, including U.S. job losses and China's economic gains.

"It is a step backward for workers in Central America, and a job-killer here at home," said House Minority Leader Nancy Pelosi (D-San Francisco). The agreement "hurts U.S. workers … and fails to protect the environment," she said.

Rep. Bill Thomas (R-Bakersfield), the Ways and Means Committee chairman who steered the bill through the House, said the near-unanimous opposition of Democrats would help the Republican Party solidify its political gains of recent years.

"I wondered when this moment would come. Apparently it comes tonight," Thomas said before declaring an end to debate. "Tonight … we mature into a permanent majority. We will lead. We will be progressive. We will help our neighbors."

Supporters acknowledged that CAFTA's economic impact would be relatively small. Total two-way trade between the United States and the six other CAFTA countries is $32 billion a year, a tiny slice of America's $11-trillion economy.

But CAFTA's political symbolism loomed large.

Congress has not rejected a major trade pact in more than four decades, and CAFTA's defeat could have undermined Bush's efforts to encourage the spread of democracy to combat terrorism, and to negotiate bigger hemispheric and global trade agreements.

CAFTA was also seen as an important test of Bush's ability to steer major legislation through Congress in his second term. The president's top domestic priority, Social Security restructuring, has stalled in the face of unexpectedly strong opposition and lukewarm Republican support.

Bush applauded the House for approving the pact.

"This agreement will level the playing field and help American workers, farmers and small businesses," he said in a statement. "The agreement is more than a trade bill; it is a commitment of freedom-loving nations to advance peace and prosperity throughout the Western Hemisphere."

In the hours leading up to the floor vote, political operatives and congressional aides on both sides of the issue said it remained unclear whether the White House had sewn up enough votes to ensure CAFTA's passage.

The GOP leadership held the vote open for more than an hour, well beyond its scheduled 15-minute expiration. Onlookers gazed from the galleries and members milled about on the floor as leaders rounded up the last few votes they needed to put CAFTA over the top.

In the end, 202 Republicans voted for CAFTA and 27 against it. Most of the GOP defectors represented districts with small manufacturers, textile makers or sugar growers that feared they would be hurt by CAFTA's provisions.

On the other side of the aisle, 15 Democrats voted for the agreement and 187 against, along with one independent. The opponents included a number of pro-trade Democrats who had backed previous agreements, a reflection of the slippage that has occurred since Bush took office.

Two members — Republicans from Virginia and North Carolina — did not vote. The House has one vacancy.

The California delegation split along party lines, with all Republicans supporting the pact and all Democrats opposing it.

Many of the opponents cited the disillusionment that followed approval of the North American Free Trade Agreement, the landmark 1994 accord that eliminated trade barriers with Canada and Mexico and was blamed for subsequent losses of factory jobs, particularly in the textile and apparel industries.

"CAFTA is NAFTA's ugly cousin," Rep. Walter B. Jones (R-N.C.) said.

Rep. Howard Coble  of North Carolina, one of the GOP members who bucked the president and party leaders, said he had told Bush about his late mother, who sewed pockets in overalls in a North Carolina apparel plant.

"When textile workers, especially female workers, plead with me to vote against CAFTA, I said to the president, 'It's my mama talking to me,' " Coble said. "I cannot turn a deaf ear to those pleas."

Bush and his allies used two basic arguments to try to overcome such concerns. One emphasized America's economic interests, the other its national security.

Although the CAFTA economies are small, they collectively represent America's 10th-largest export market, and the second largest in Latin America, behind Mexico. About 80% of the region's exports already enter the United States duty-free under the existing Caribbean Basin Initiative. A much higher percentage of U.S. exports are subject to tariffs that would be removed under CAFTA, including many agricultural products grown in California and other farm states.

Rep. Wally Herger  (R-Chico) said the rice, almonds, pistachios and dried plums that come from his Northern California district now face average tariffs of 35% to 60% in the CAFTA countries. "This is vitally important to all U.S. agriculture, especially in my home state," he said.

In recent days, Bush and his allies have placed increasing emphasis on the national security argument. They said CAFTA's approval was necessary to demonstrate U.S. support for the fledgling democracies of Central America, whose citizens only recently emerged from years of authoritarian rule and whose future prospects will be determined in part by economic advances.

"For 500 years, they've been suffering. They need and certainly deserve a seat at the table of the global economy," said Rep. James P. Moran (D-Va.), one of the few members of his party who voted for CAFTA. "It is important to be on the right side of the political equation, but it's even more important to be on the right side of history."

As the showdown neared, the sales effort became more intense. It included a personal appeal by Bush and Vice President Dick Cheney, who were whisked to the Capitol by motorcade Wednesday morning to ask House Republicans to support the president's legislative priorities. Participants said Bush spent about 30 minutes talking about CAFTA.

Rep. Bob Ney (R-Ohio) said the lobbying didn't stop even after he announced early Wednesday that he would vote against the agreement. By late afternoon, he was still hearing from high-ranking administration officials, including Commerce Secretary Carlos M. Gutierrez.

"I'm getting calls as we speak," Ney told a reporter in a Capitol hallway.

Ney said CAFTA was opposed by many people in his district who saw it as part of a broader globalization process that had contributed to America's big trade deficit with China, repeated rounds of factory closings and the "outsourcing" of U.S. jobs to other countries.

"People relate trade agreements with loss of jobs, and they want something done," Ney said. "I know that CAFTA is not China, but my constituents don't."

The sales campaign employed a combination of political carrots and sticks. Administration officials and Republican leaders made it known that they were willing to negotiate side agreements and consider special requests to win votes. One last-minute deal provided special protections for manufacturers of denim cloth and trouser pockets, and brought at least five Southern Republicans on board.

At the same time, Bush's aides and allies pressured Republican holdouts to support the president or face possible political repercussions. The
U.S. Chamber of Commerce spread the word that it would reduce financial support for lawmakers who voted against CAFTA.

Earlier Wednesday, the House voted to improve oversight of China's trade practices, approving a relatively modest measure that might not have seen the light of day if not for CAFTA.

The China bill, adopted 255 to 168, authorizes U.S. officials to impose retaliatory tariffs when the governments of "nonmarket" economies such as China are found to be subsidizing their export industries. The bill also calls for increased monitoring of China's currency policies and trade law compliance.

Sponsors called it a measured response to widespread concern about China's willingness to abide by the rules of global trade. Opponents described it as a ploy by Republicans to improve CAFTA's prospects.

The China bill was not embraced by the White House, but House leaders agreed to bring it to a vote in a deal that persuaded a handful of Republicans to support the Central American trade agreement.