Hearings test out positions on CAFTA

The Central American Free Trade Agreement (CAFTA), a NAFTA-like trade treaty with five Central American nations and the Dominican Republic, may be closer to a vote after coming up for discussion in congressional hearings last month.

The Senate Finance Committee held a hearing April 13, and the House Ways and Means Committee followed with a hearing April 21. At Finance, senators heard from six representatives of business and one from labor. One business representative, a lobbyist for the U.S. sugar industry, spoke against the treaty. Sugar imports from Central America are expected to increase under CAFTA, and could put U.S. sugar producers out of business.

Mark Levinson, chief economist for the hotel and textile union UNITE HERE, was labor’s voice at the hearing.

“It’s time for policymakers to take an honest look at our trade policy and the impact it has had,” Levinson said.

Levinson told senators the most likely result of CAFTA is a deterioration of the trade balance, more jobs lost in the United States, and the continued deterioration of Central Americans’ standard of living.

Senators from both parties expressed concerns about the agreement, but the strongest criticism came from Democrats.

Democrat Max Baucus of Montana called CAFTA “the most divisive trade agreement to come before us since NAFTA,” and said that without presidential leadership, the agreement is going to face an uphill battle.

Both Oregon Senators — Republican Gordon Smith and Democrat Ron Wyden — are on the committee.

At the hearing, Wyden expressed concern about CAFTA’s impact on Oregon sugar beet growers, and criticized additional protections for pharmaceutical companies in the treaty.

“I’m one of the people that you’ve got to get in support of to have any chance of passing this,” Wyden told U.S. Trade Representative Peter Allgeier. “I have voted for all the trade agreements, the major ones, in the past and have the welts on my back to show for it. But unless I can tell agricultural concerns in Oregon that we’re being responsive to their needs, and you do something about the egregious favoritism for these special interests that are in this agreement, I won’t be able to go along.”

In the House, AFL-CIO Secretary-Treasurer Richard Trumka testified before the Ways and Means Committee that CAFTA represents a failed model of trade. CAFTA will exacerbate inequality in Central America, Trumka said, erode wages in the United States, and undermine the ability of governments to protect public health and the environment.

Oregon Representative Peter DeFazio and several other Democratic members of Congress had to fight to make a statement before the committee. After the members were denied the usual courtesy of providing testimony, they demanded to be heard and were eventually recognized.

“You can’t look at a $700 billion trade deficit, millions of lost jobs, outsourced industries and erosion of our manufacturing base without seeing a problem with our trade policy,” DeFazio told the committee. “The supporters of NAFTA and the WTO (World Trade Organization) promised endless riches for workers, farmers, businesses and the U.S. economy. The reality has been very different.”

Union officials oppose CAFTA because it lacks meaningful, enforceable labor rights protections. In fact, they say, CAFTA’s labor rights provisions are weaker than those in the existing trade covenants with the nations of the region. All CAFTA does is require that countries enforce their own laws, however strong or weak they may be. By contrast, CAFTA contains elaborate enforcement mechanisms for investors’ rights.

CAFTA opponents flooded congressional offices with phone calls the day of the Senate hearing. In Oregon, the focus has been on Representative Earl Blumenauer and Senator Gordon Smith. Anti-CAFTA activists say they’ve generated over a thousand postcards to Blumenauer on the subject, including 600 distributed by stewards of United Food and Commercial Workers Local 555.

And anti-CAFTA union members and others turned out for a forum on trade the morning of May 2 at University of Portland.

The forum was organized by Congressman Blumenauer, who teamed up with Senator Smith to preside over a panel and audience questions.

Members of numerous unions attended, including a busload of Portland longshore workers, and three workers at a Nyssa, Oregon, sugar refinery who drove six hours to attend. Facing competition from foreign sugar producers, Amalgamated Sugar has already lost over 400 jobs, and the 50 or so that remain are at risk of losing theirs.

CAFTA opponents held a rally just prior to the Blumenauer-Smith event. Longshore Local 8 president Leal Sundet read the names of all the plant closures in Oregon that government agencies have certified were casualties of foreign trade. And Oregon AFL-CIO President Tim Nesbitt told rallygoers Oregon has lost over 30,000 jobs due to trade since NAFTA was ratified in 1993.

The trade forum panel included representatives of Nike, Intel, the Port of Portland, and several pro-CAFTA agricultural groups. Speaking against CAFTA and treaties like it were a professor from Washington State University and national AFL-CIO trade policy expert Thea Lee. Lee was scheduled to talk with a Seattle business group later that day, and Nesbitt was able to get her a spot on the panel.

“The era when most Oregonians could support a middle-class lifestyle with a high school education and a good work ethic, is a thing of the past,” Blumenauer told the forum. His point: to compete in the new global economy, American workers will need to be educated.

But telling workers to “get educated” isn’t enough, Lee argued, not when a careful study of trade flows shows that the United States has been losing its competitive edge even in services and advanced technology. “What we need is a national economic strategy,” Lee said.

Lee said the labor movement has no quarrel with trade; its quarrel is with the rules that govern trade, which in recent years have been written to benefit corporations while playing workers from different countries against each other.

“We want workers in developing countries to have the same rights we fought for, including the right to organize.”

Instead, Lee said, treaties like CAFTA undermine the bargaining power of workers, not just in the U.S. but in developing countries as well. “If NAFTA didn’t deliver for Mexico, why would we expect CAFTA to deliver for Central America?”

More than a debate about trade with that region, CAFTA has become a referendum on current U.S. trade policy, Lee said, and it’s in deep trouble in Congress.

Lee’s testimony got the loudest applause, while Blumenauer and Caitlin Morris of Nike were interrupted by hisses and boos from some in the audience, provoking the peeved congressman to threaten to pull the plug on the forum. Later, during the question period, Blumenauer abruptly ended the meeting when some audience members began to chant and wave signs.

The forum was videotaped by Multnomah County Television and will be played on Cable Channel 29 in Portland and East Multnomah County at 8 p.m. Friday, May 6; 4 p.m. Saturday, May 7; 5 p.m. Sunday, May 8; 8 p.m. Tuesday May 10; 10 a.m. Saturday, May 14; and 11 a.m. Sunday, May 15.

Both Blumenauer and Smith spoke of the value of increased trade, but gave no indication of how they’ll vote on CAFTA. Blumenauer told the Northwest Labor Press he hasn’t made up his mind on the treaty.

UNITE HERE economist Levinson says he thinks CAFTA backers don’t yet have the votes they need to pass it.