Sugar, Textiles Sour on CAFTA Deal

For U.S. trade negotiators, the marathon negotiations to reach a free trade agreement with four Central American countries produced a fair and workable accord -- cutting into the sugar and textiles industries to bring the quartet of small nations on board.

But on Thursday -- the day after negotiators reached a tentative Central American Free Trade Agreement -- voices protesting the accord were loud.

And those protesting weren't just the usual opposition mix of labor, environment, human rights and consumer groups. Leading the chorus was Big Sugar and parts of the battered textile sector, which had previously been on board for regional free trade agreements.

Even before CAFTA was finalized early Wednesday, there was widespread agreement that the accord faced a more difficult battle for approval than an earlier free trade agreement with Chile because Democrats are calling for tougher rules on labor and environmental protection in the Central American countries.

Opposition from some key industries adds a new twist to CAFTA. From sugar beet farmers in Texas and Colorado to sugar cane growers in Florida, and many of the surviving textile companies, complaints began to rain on lawmakers, some in Republican districts.

Such complaints are likely to find more resonance the closer the vote on CAFTA is pushed to next November's elections. The Bush administration would like to have the bill up on Capitol Hill and approved by July.

U.S. trade officials were quick to defend the sensitive points of the negotiations.

One official, who asked to remain anonymous, insisted that the additional 85,000 tons of sugar quotas given to El Salvador, Guatemala, Honduras and Nicaragua represented a mere 1 percent of the market.

But sugar growers were not buying this pitch and vowed to fight the accord.

''That is their spin on this,'' said Dalton Yancey, executive vice president of the Florida Sugar Cane League, an industry association.

Yancey noted that on top of the 85,000 tons would come additional access for Costa Rica, if it decides to join the accord; pending bilateral agreements with the Dominican Republic and Australia; as well as Brazil possibly in a proposed Free Trade Area of the Americas. In other words, much more access than just 1 percent.

''When you put any amount of sugar in a declining market, that means somebody is going to have to stop making it in the United States,'' Yancey said. ``We have to draw the line in the sand and make our stand, and this is where we are going to make our stand.''

Praise for the balanced textile approach came from another trade official, who also asked to remain anonymous. ''We strike an excellent balance between the needs of the U.S. apparel makers in Central America and the needs of U.S. yarn and textile manufacturers,'' the official said.

In response, an ad hoc coalition of American manufacturing associations -- including some textile associations -- called for a moratorium on new trade agreements, including CAFTA.

''We are extremely alarmed at the rapid disintegration of our manufacturing base,'' said a statement from the group.

The American Textile Manufacturers Institute issued a statement opposing the accord.

But Wilbur Ross, owner of Burlington Industries, said the textile industry needs to stick together and not fight. ``How do you fend off the common enemy, which is the Asian importers?''

Textile makers are opposed because under the proposed accord Canadian and Mexican woven fabric can be used in the assembly of duty-free clothing. Another new exception will allow boxer shorts, pajamas, sleepwear and bras to use fabric made in countries like China as long as it is cut and sewn in Central America, and any of 49 specific textile products deemed in short supply can be brought in from outside the United States or the region under CAFTA.

Auggie Tantillo, Washington coordinator of the American Manufacturing Trade Action Coalition, said that a good agreement would have allowed duty-free access for Central America-assembled apparel with textiles from those countries or the United States -- as the Caribbean Basin preference agreement now stands.

''But [negotiators] had to step over the line and allow for Chinese components, Mexican components, Canadian components -- all of which strike directly at the heart of the U.S. industry,'' Tantillo said.

Whether the 316,000 textile job losses and scores of textile factories closings since President Bush took office will be a factor in a vote on the agreement with the four Central American countries remains a question.

Still, CAFTA has its fans -- from the U.S. Chamber of Commerce and the National Association of Manufacturers to smaller groups like the U.S. Apple Association and the California Table Grape Commission.

But one Capitol Hill aide compared the effort to gain Congressional approval of the trade agreement to the Clinton administration's win of a trade pact with China just before the 2000 election and Democratic candidate Al Gore's loss of West Virginia in the last presidential election.

''That was all about trade. It has absolutely cost the Democrats,'' he said. ``It is not clear if it will cost the Republicans.''