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(06/05/05) Clyde Prestowitz quoted in the St. Louis Post-Dispatch

(06/05/05) Clyde Prestowitz quoted in the St. Louis Post-Dispatch
Congress weighs new free trade zone
St. Louis Post-Dispatch (MO)
Copyright 2005 St. Louis Post-Dispatch
June 5, 2005
Section: NewsWatch
Congress weighs new free trade zone
BILL LAMBRECHT Post-Dispatch Washington Bureau

WASHINGTON In 1993, Sen. Jim Talent, R-Mo., was a congressman eager to buck a Democratic president and vote against the North American Free Trade Agreement. Sen. Dick Durbin of Illinois, also a House member back then, withstood pressure from labor and many in his Democratic Party when he decided at the 11th hour to support NAFTA. This time it's not NAFTA, but CAFTA -- the Central American Free Trade Agreement -- that Congress will begin taking up this week in the Senate Agriculture Committee. Times have changed and so have the politics of trade. As lobbying on both sides of the issue intensifies, the betting is that Talent and Durbin will view the new labor agreement differently than the one they voted on 12 years ago. There's a Republican in the White House now, and President George W. Bush can be extremely helpful in Talent's re-election campaign. Dropping into St. Louis briefly last week, he helped Talent raise $1.5 million. "I'm leaning in favor of it," Talent said, noting that some of his concerns about NAFTA hadn't materialized. "It (CAFTA) appears to present some solid potential for export growth for our agriculture producers and that's certainly important when you represent Missouri," he said. Meanwhile, Durbin, who has since climbed to Senate minority whip, will be pressured as a leader to vote with the Democratic rank-and-file against CAFTA.

To help make up his mind, Durbin plans to hold meetings starting this week with small groups about the trade proposal.

On its surface, the CAFTA debate has a NAFTA-like ring: Supporters say that it would expand markets for U.S.-made products while spreading prosperity in our hemisphere.

Meanwhile, Durbin, who has since climbed to Senate minority whip, will be pressured as a leader to vote with the Democratic rank-and-file against CAFTA.

To help make up his mind, Durbin plans to hold meetings starting this week with small groups about the trade proposal.

On its surface, the CAFTA debate has a NAFTA-like ring: Supporters say that it would expand markets for U.S.-made products while spreading prosperity in our hemisphere.

Meanwhile, critics offer an updated version of Ross Perot's memorable "giant sucking sound" argument, contending that jobs in the United States will be sacrificed as multinational companies more freely exploit workers and the environment in Central America.

Times have changed

While the arguments are similar to 12 years ago, the debate reflects changing perceptions and new fears.

May 28 marked the one-year anniversary of the United States signing the CAFTA free trade agreement with the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua and the Dominican Republic. The agreement must be approved by Congress to take effect. The pact would phase out trade tariffs over 20 years and put an immediate end to many of the duties charged at the borders for farm products from the United States.

It took the White House less than three months to engineer passage in Congress of several other trade deals -- with Australia, Chile, Morocco and Singapore.

After informational hearings this week, congressional committees may not take up CAFTA in earnest until later this month and might wait even longer.

By some accounts, the delays reflect a growing suspicion of trade deals underlying the nation's $600 billion-plus trade deficit. A debate about NAFTA's benefits never is far from the surface.

Clyde Prestowitz, a trade analyst and founder of the nonpartisan Economic Strategy Institute in Washington, sees suspicions about CAFTA as part of a broader worry that globalization is giving the United States the short end of the stick.

Prestowitz, a NAFTA supporter in the early 1990s, believes that NAFTA was oversold as a means to bring prosperity on both sides of the Mexican border and in so doing end illegal immigration.

Meanwhile, China and India "are eating our lunch" in trade and job exports, Prestowitz remarked.

"I think the CAFTA opposition is a reflection of the fact that there's increasing unease, angst and skepticism about the question of what all this free trade really means," Prestowitz said by phone last week while on a promotional tour for his new book, "Three Billion New Capitalists: The Great Shift of Wealth and Power to the East."

The president last week put CAFTA on his short list of his priorities in Congress, calling it "a good deal" for the United States.

"It'll keep jobs here in America. And it'll support young democracies, and that's going to be important. There's a geopolitical as well as economic concern for CAFTA," Bush said at a news conference.

Lobbying on both sides

A host of business organizations has stepped up their pro-CAFTA campaigns. Every member of Congress received a letter last month from a coalition of agriculture and food groups, among them the National Corn Growers Association and the American Soybean Association, both based in St. Louis.

The groups complained that tariffs averaging 11 percent on their products has meant steady loss of business in the CAFTA nations as other countries operating under more favorable trade agreements fill those markets.

Companies like Kraft Foods see CAFTA springing open markets for processed foods like cheese and cookies. Even plant managers like John Strotbeck, who manages the Kraft-owned Oscar Mayer hot dog plant in Columbia, Mo., have been instructed to reach out to members of Congress.

In a letter to Rep. Kenny Hulshof, R-Columbia, Strotbeck observed that processed foods shipped to Central America are slapped with stiff tariffs -- 66 percent on cream cheese in Costa Rica.

"This trade agreement would help to level the playing field and could benefit consumers throughout the region, as well as the 640 employees in our plant," he wrote.

He might have saved the postage considering that Hulshof supports CAFTA.

But opponents contend that the lobbying has done little thus far to persuade the blocs in Congress most likely to decide CAFTA's fate -- political moderates.

Rep. Sherrod Brown, D-Ohio, who is coordinating the anti-CAFTA campaign in the House, asserted that his side would have won by some 40 to 50 votes had the measure been taken up on the floor last week.

"I think it has to do with the fact that members of Congress are listening to their constituents. It's pretty hard to argue that our trade policy is working," he said.

Brown acknowledged that the vote will get close when the White House begins to apply pressure. "There will be carrots and sticks all over the place, obviously," he said.

As members prepare for that debate, they may be considering which of the White House carrots would taste the best back home.

How will they vote?

Sen. Christopher "Kit" Bond, R-Mo., has the reputation as a dependable advocate for free trade. But asked last week about CAFTA, Bond suggested that the White House might want to get behind his $2 billion proposal in Congress to double the size of locks on the Mississippi and Illinois rivers.

"While this agreement appears to be widely supported by farm exporters, I am concerned that policymakers are not adequately mindful of the strong link between open foreign markets and the need to maintain a sufficiently competitive land and water transportation system necessary to win those markets," Bond said in a statement.

Rep. Russ Carnahan, D-St. Louis, is a member of the New Democrat Coalition, an alliance of self-described Democratic moderates -- the sort of Democrats Bush needs to pick off if he hopes to prevail on CAFTA.

But Carnahan sounded immune to the president's entreaties, citing NAFTA's unrealized hopes as a reason middle-of-the-road politicians aren't swayed.

"They (political moderates) are opposing CAFTA, and I think it's due to this failure of NAFTA and what was promised," he said.

Many members of Congress prefer silence for the time being rather than antagonizing one side or the other perhaps unnecessarily if opposition doesn't ebb and CAFTA doesn't reach the Senate and House floors.

Rep. Jo Ann Emerson, R-Cape Girardeau, voted against the trade agreement with Australia but still is listening to both sides on CAFTA, a spokesman said.

Likewise, Rep. Ike Skelton, D-Lexington, who supported NAFTA 12 years ago, was described as still mulling over the new agreement. CAFTA opponents are not counting on his support.

The recent experiences of Rep. William Lacy Clay Jr., D-St. Louis, points to heightened activity. Clay got a visit from U.S. Trade Representative Rob Portman seeking his support for CAFTA. House Majority Whip Roy Blunt, R-Mo., also has appealed to him to join the pro-CAFTA ranks.

Last week, in between calls from labor union representatives asking him to vote against CAFTA, a representative from Brown Shoe Co. told him that the trade agreement could lead to more shoes being made in St. Louis.

"I'm taking in both sides' arguments and trying to make an informed decision on which way to vote," Clay said.

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