Tuesday, October 12, 2004

CAFTA prospects

Bob Davis surveys the political landscape on trade in the Wall Street Journal, and says the next occupant of the White House will necessarily spend more time on Latin America. Davis is fairly blunt about who Bush has to rely upon to get CAFTA passed, while pessimistic about Kerry's prospects for a revised agreement:

If the president wins re-election, he will rely on the lobbying power of U.S. retailers and importers to push the deal [CAFTA] through Congress. He also may promise to crack down on Chinese clothing imports as a way to ease textile-industry opposition.

If Sen. Kerry wins, the equation changes. He says he would renegotiate the pact to improve labor and environmental standards in Central America. That is a reprise of former President Bill Clinton's position on the North American Free Trade Agreement, which was negotiated by the first President Bush. In 1993, Mr. Clinton negotiated Nafta labor and environmental side deals and won passage. But Democratic Party support for free trade is much weaker now than it was during Mr. Clinton's first term, so Mr. Kerry may be unable to win enough Democratic lawmakers to compensate for Republican votes he would lose.

What does seem implausible is an assertion in this same article that "a defeat in Congress for the Central American deal and continued stalemate on a hemispheric trade package would sour relations and give a boost to populist forces in the region who already are dubious about the value of free trade." If CAFTA goes through, it would take years for the benefits to trickle down to the poor. With or without CAFTA, there will be fertile terrain for "populists" for many years to come.

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