President Signs Latin American Free-Trade Pact

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The New York Sun

WASHINGTON – President Bush signed a free-trade agreement with six Latin American countries yesterday, celebrating a victory in Congress so narrow and grueling that it cast doubt on the future of other trade-opening pacts the administration is negotiating.


“Strengthening our economic ties with our democratic neighbors is vital to America’s economic and national security interests,” Mr. Bush said at an East Room ceremony in the White House.


Mr. Bush’s signature on the Central American Free Trade Agreement capped a bruising political battle.


The relatively modest agreement, which Mr. Bush first approved over a year ago, passed the House last week by just a two-vote margin, obtained only after the president and House Republican leaders cajoled and made side promises to wavering lawmakers.


The agreement – with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic – eliminates tariffs and opens up the region to American goods and services. It also lowers obstacles to investment in the area and strengthens protections for intellectual property.


“CAFTA is more than a trade bill,” said Mr. Bush, suggesting national security implications.


He said the agreement would help buttress still-fragile Central American democracies to help them better defend against “forces that oppose democracy, seek to limit economic freedom, and want to drive a wedge between the United States and the rest of the Americas.”


Only 15 Democrats voted for the pact in the House, a break from the bipartisan support major trade legislation has received in the past in both Republican and Democratic administrations. The pact was approved in the Senate, which is more favorable to trade agreements, 54-45 on June 30.


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


The closeness of the 217-215 House vote raised questions about other free trade agreements the Bush administration is negotiating, including ones with Bahrain, Thailand, and the Andean countries of South America. It also cast a cloud over the fate of American backed trade talks being undertaken by the World Trade Organization to reduce global trade barriers, known as the Doha round.


Early in his first term, Mr. Bush talked grandly of a free-trade agreement encompassing the entire Western Hemisphere and another one linking America with Pacific-ring nations. But the administration now speaks in much more modest terms.


“Where are the centrist Democrats who are committed to free and fair trade?” Bush spokesman Scott McClellan said when asked about prospects for future trade agreements.


“If you look at votes, there was strong consensus among Republicans, and this time you had only 15 (House) Democrats that supported the agreement,” Mr. McClellan said.


The New York Sun

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