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Trade Wars – Revenge of the Myth: Deals for Trade Votes Gone Bad

By Public Citizen's Global Trade Watch

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Proponents of the Central America Free Trade Agreement (CAFTA) are finding themselves trapped in a lobbying marathon comparable to watching the entire Star Wars series in the order the movies were made: six episodes in and you’re just getting back to where you started, while the economy is slipping rapidly toward the Dark Side. Eleven years of the economic, environmental, social and political results of the North American Free Trade Agreement (NAFTA) have made CAFTA-NAFTA expansion a hard sell in the U.S. Congress. “Free trade” Democrats won’t support CAFTA because it rolls back the stronger labor rights protections required in the existing Caribbean Basin Initiative (CBI) rules now governing trade with the CAFTA target countries, extends NAFTA model foreign investor protections that have been used to attack key health and environmental laws, and contains patent rules which will increase drug prices in Central America. Farm state Representatives from both parties are increasingly critical of the trade model CAFTA extends as they have seen farm incomes decline even as the volume of trade flows increases. Additionally, a block of Republican votes from sugar cane and sugar beet districts vows to oppose CAFTA unless sugar is removed from the deal. Meanwhile, Republicans from textile and apparel districts view CAFTA’s looser rules of origin as eliminating the special demand for U.S. fabric that the CBI program’s rules of origin created, thus creating a back door for yet more imports of Chinese textile and apparel products. Democratic and GOP Congresspeople alike are hearing from small business people in their districts that CAFTA-NAFTA expansion will push more U.S. manufacturers out of business while providing potential gains only to the largest companies.