Senate approves trade agreement

Durbin, Obama oppose CAFTA; Cat, farm groups support deal


Methodist Medical Center

Friday, July 1, 2005

By Dori Meinert

of Copley News Service
WASHINGTON, D.C. - The Senate on Thursday approved the controversial Central America Free Trade Agreement 54-45, with Illinois' two Democratic senators opposing the trade deal because they said it fails to adequately protect American workers.

Illinois farm groups and manufacturers, including Caterpillar Inc., have lobbied in support of CAFTA, while labor and environmental groups oppose it.

The trade agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic is expected to face stronger opposition when it comes up for a House vote in July.

The Bush administration argued it would be good for U.S. businesses, encouraging more U.S. exports to the region with the reduction of tariffs on U.S. goods, and for consumers, who would benefit from more affordable everyday goods such as food, clothing and housewares.

Illinois' economy could receive a boost of $445 million, including 2,400 new jobs if CAFTA is passed, according to the U.S. Chamber of Commerce.

Peoria-based Caterpillar Inc. hopes to significantly increase its exports to that region if the trade agreement is passed. CEO Jim Owens wrote more than 150

House and Senate members, urging them to support the agreement.

"It improves the competitiveness of the products we make in Illinois," said Caterpillar lobbyist Bill Lane.

Currently, the tariff on an off-highway truck entering Costa Rica is 14 percent.

"A $1 million off-highway truck means our customers have to pay up to $140,000 for the privilege of buying American-made products, and what CAFTA will do is remove that tariff immediately," Lane said.

Caterpillar also could benefit if the trade deal attracts investors to those countries, enabling them to move forward with $10 billion in infrastructure projects, Lane said.

Illinois exports to the region totaled $211 million in 2004, according to the U.S. Department of Labor. Communications equipment topped the list of exports at $22 million, with plastic products totaling $15 million and agriculture and construction equipment at $13 million.

The Illinois Farm Bureau also supports CAFTA.

"With the kinds of food Illinois farmers produce in abundance - our corn, soybeans, pork and beef - any trade agreement that ultimately eliminates high tariffs and creates new markets for our products will always be a good deal for Illinois agriculture," Farm Bureau President Philip Nelson said.

However, Mark Trone, a United Steelworkers representative who represents Galesburg and other western Illinois communities devastated by plant closings, said CAFTA spells further disaster for central Illinois families dependent on manufacturing jobs.

"There are a lot of people out of work now, looking for jobs, who can't find them. Jobs they find don't pay near enough. This compounds the problem that we're in. I don't see any benefit to CAFTA at all," Trone said.

The Galesburg area has lost about 1,870 plant jobs and another 2,783 support jobs as a result of the closings of the Maytag and Butler plants, which Trone blames on a CAFTA predecessor, the North American Trade Agreement, which prompted many companies to take advantage of cheaper labor in Mexico.

Illinois Stewardship Alliance president Mark Beorkrem said CAFTA would allow imports of ethanol and specialty crops that would hurt Illinois farmers.

Sen. Dick Durbin, who has supported past trade agreements including NAFTA, said CAFTA "is a step backwards from current U.S. trade laws."

"If there is one casualty in CAFTA, that casualty would be the worker, not just the American worker, but workers in Central America," Durbin told his colleagues on the Senate floor.

Durbin said that the United States has lost 2.8 million manufacturing jobs, including 140,000 in Illinois in the past four years of the Bush administration.

"The trade policy we have today is exporting jobs. How long can this continue?" Durbin asked.

Freshman Sen. Barack Obama said "our failure to respond to globalization is causing a race to the bottom that means lower wages and stingier health and retiree benefits for all Americans. It's causing a squeeze on middle-class families who are working harder but making even less and struggling to stay afloat in this new economy."

During a recent visit in downstate Illinois, Obama said one worker told him "It doesn't do me much good if I pay a dollar less on a T-shirt at Wal-Mart, but I don't have a job."

In the House, central Illinois Reps. Ray LaHood, R-Peoria; Jerry Weller, R-Morris; and John Shimkus, R-Collinsville; support CAFTA. Rep. Lane Evans, D-Rock Island, whose district includes Galesburg, opposes it.