CAFTA Could Help Agri Companies (Editorial)

The U.S. Senate, in one of the closest votes in recent memory on a trade issue, has approved the Central American Free Trade Agreement. The coming vote in the House is expected to be even closer.

The pact would eliminate most trade restrictions on about $32 billion in annual trade with the Dominican Republic and the five Central American nations of Costa Rica, El Salvador, Honduras, Guatemala and Nicaragua.

In the whole scope of trade around the world, that’s pretty small potatoes for the U.S., but both President Bush and those against the agreement have drawn a line in the sand over the issue.

To be frank, the treaty might have a much better chance for passage if the president could make up his mind: Is he really for free trade as he likes to proclaim, or is he willing to go along with whichever lobbying group thinks its interest is being harmed — steel, textiles, lumber, etc.?

The White House is pulling out all the stops to get Congress to approve the agreement.

And despite a lot of rhetoric being tossed out by both sides, it’s probably in the best interest of the United States to pass it.

The truth is that it’s likely to be similar to the North American Free Trade Agreement, which even though it covers two major trade partners, has had little effect — either positive or negative — on U.S. interests. A Congressional Budget Office study showed that NAFTA had virtually no effect on the U.S. trade balance with Mexico, even after eight years.

We believe, however, that CAFTA is an agreement that should be approved.

The treaty could open up new markets as it eliminates barriers to U.S. exports, and that makes it worth it in our view.