C. American exporters upbeat over trade

AP on Bakersfield Californian ^ | 7/28/05 | Marianela Jimenez - AP

[NormsRevenge]

SAN JOSE, Costa Rica (AP) - For Gerardo Hidalgo, U.S. congressional approval of the Central American Free Trade Agreement is welcome news. If Costa Rica ratifies, it means he can export more rocking chairs to Texas and California - without tariffs or other trade barriers.

But rice farmer Oscar Campos predicts his fields will soon be empty. He fears he won't be able to compete with big U.S. growers.

Hours after Congress sent the pact to President Bush on Thursday for his signature, opponents and supporters in Central America were mobilizing for their final battle over ratification of the free trade deal.

Farmers, unions and environmental groups argue the treaty will drive small producers off their land, undermine labor efforts and encourage pollution. Supporters say it will boost exports and help businesses add jobs.

Signed a year ago, CAFTA would eventually eliminate tariffs and other barriers on trade between the United States and the Central American nations of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republican in the Caribbean.

The last hurdle will likely be Costa Rica, one of three countries whose legislatures have not yet approved the pact.

Costa Rican President Abel Pacheco said lawmakers in his nation were in no hurry to vote on CAFTA. Pacheco has said he wants to approve fiscal reform packages first.

"We Costa Ricans have a reputation for taking things slowly, and this has worked for us down through history," he said, speaking in Panama City, where he was attending a summit of Caribbean leaders.

Nicaraguan lawmakers said they expected to hold a successful vote on CAFTA soon. In the Dominican Republic, the agreement has been held up by concerns it would hurt the sugar industry.

At stake is the region's rapidly changing economy - once based on bananas and coffee, but increasingly dependent on textile factories that make everything from pajamas for Wal-Mart to women's gloves for upscale U.S. department stores.

Likely left behind will be farmers like Campos, who faces phased-out government supports and greater U.S. competition.

CAFTA "doesn't even touch the topic of U.S. subsidies, while we are left with no help," he said.

But Campos expressed optimism that Costa Rica will be the country to hold up the agreement, rejecting CAFTA because "here, people think."

Hidalgo, on the other hand, hopes for approval. He says CAFTA would help him expand his business by guaranteeing freer access to the U.S. market.

His company employs 32 people and produces 1,000 rocking chairs a month - nearly all of which are sent to the United States.

"With CAFTA, we will at least be able to maintain the conditions we have now," he said.

Luis Carlos Chaves, whose Avantica software company exports 90 percent of its products to the United States, agreed.

"In the short term, it won't change much," he said. "But in the long term, we can expand."

Central American leaders say the pact will bring more foreign investment and much-needed jobs.

"The House of Representatives has voted in favor of liberty, democracy and free trade in Central America," Salvadoran President Tony Saca, one of the most outspoken proponents of the accord, said after the deal's narrow passage Thursday in Washington.

Central America is hoping to match the success of Mexico, which signed the North American Free Trade Agreement, with the United States and Canada 11 years ago.

NAFTA boosted investment in Mexico's assembly-for-export plants along the U.S. border, raising wages and drawing thousands of workers to crowded frontier cities where the plants are concentrated.

The agreement has diversified Mexico's economy and market - filling stores with everything from American cereals to televisions while making it easier for large Mexican producers to send fruit and vegetables north.

There have been pains, too. The changing economy has driven many of Mexico's small farmers off their land and into the cities, where many have had trouble finding work.

[Brilliant]

The vast bulk of American exports to Central America are subject to high tariffs, while the vast bulk of Central American imports to the US are not. This treaty will help from an economic standpoint. What I am worried about is the borders. What impact does this treaty have on the movement of people?

[dr_who_2]

Someone wrote a short article about that on Nationalreview.org

[ckilmer]

alas in Mexico nafta enabled US government supported grains
to strip the mexican growers of their markets. they were out of a job in short order. so they came north.

you're hearing that the same thing will happen in central america.