Bush Signs CAFTA Bill

President George W. Bush signed legislation Tuesday to implement the free trade agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic to reduce tariffs and trade barriers.

Although Bush hailed the Central American Free Trade Agreement (CAFTA) as a way to strenthen democracies, the economy, and national security, it didn’t win easily.

The House of Representatives narrowly passed the measure last week by just two votes ( 217 to 215), only after Bush and House Republican leaders engaged in some heavy-duty arm-twisting and cajoling — including offering side promises — to convince wavering lawmakers, the Associated Press reported. The Senate had a bit more support, voting in favor of it by 54 to 45.

Opposition to CAFTA was fierce, especially from the sugar industry.

"Critics said the the measure would cost U.S. jobs, particularly in the sugar and textile industries, a claim supporters disputed," Business Week reported.

ruFor example, a Detroit News article noted that "Michigan’s sugar beet industry, which contributes an estimated $115 million to the state economy, is sour on CAFTA because of fears it will result in a surge of cheaper sugar." 

"I don’t see any benefits for workers, for sugar people," Democratic Rep. Charlie Melancon complained to the AP. Melancon said "his family owed everything to 225 years of sugar production in his home state of Louisiana."

In fact, CAFTA was approved in the House by including a proviso that "stated that any sugar imports above the cap established under the current farm act, whether under CAFTA-DR, the North American Free Trade Agreement or any other trade agreement, would be denied entry into the U.S. unless an equivalent amount of U.S. sugar is converted into ethanol or other non-food uses, with at least 109,000 tons of that sugar being converted into ethanol under a pilot program run by the U.S. Department of Agriculture. In addition to the ethanol pilot program, the agreement also requires a study on the long-term promise of a sugar-to-ethanol program," Baking Business reported.

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