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Key Senate panel endorses Central American free-trade pact

Measure facing battle in House

WASHINGTON -- Senate supporters of the Central American Free Trade Agreement, a market-opening deal with six nations, predicted victory yesterday after the accord was endorsed by a crucial committee.

President Bush and his top trade officials have lobbied hard for CAFTA, but it has drawn tenacious opposition from lawmakers who think the pact would hurt their states.

A Senate vote could come as early as today.

The greater hurdle will come when the House takes up the measure next month. House Democrats who object to what they say are weak labor rights provisions in the agreement will be joined in opposition by Republicans with ties to groups, most notably the sugar industry, that contend they will be hurt by CAFTA.

Earlier yesterday, the Senate Finance Committee approved the agreement signed a year ago with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.

''Step by step, we're making good progress and building momentum for its successful passage," said US Trade Representative Rob Portman, who has led the effort to sway undecided lawmakers.

He picked up a key vote when Senator Jeff Bingaman, a New Mexico Democrat who sits on the Finance Committee, announced his support after receiving a pledge from Portman of increased spending to protect Central American workers and farmers.

Portman, in a letter to Bingaman, said the administration is committed to spending $160 million over four years to promote labor and environmental laws, as well as $150 million over five years to help subsistence farmers in three Central American countries who might be displaced by an increase in US agriculture imports.

The Bush administration has so far succeeded in enacting free-trade agreements with Singapore, Chile, Australia, and Morocco, but the CAFTA deal has been far more difficult, mainly because of near-united Democratic opposition. Democrats say provisions on labor rights are weak and will lead to a continuation of abuses such as child labor and crackdowns on organized labor.

They also say trade deals, such as the 1994 accord with Mexico and Canada, have exacerbated the US trade deficit and the flight of US jobs overseas.

Representative Sherrod Brown, an Ohio Democrat who has led the opposition in the House, predicted that in the Senate, ''CAFTA will pass with the lowest margin of any trade agreement in the modern era. With the real fight in the House, the deal is anything but done."

CAFTA would end trade barriers now in place for US goods in the six countries, which already enjoy open access to the US market. It also would clarify investment rules, strengthen protections for intellectual property and, according to supporters, solidify economic and democratic stability in a region that has been racked by civil wars in the recent past.

''There is a geopolitical component to CAFTA," said Senator Jon Kyl, Republican of Arizona. Some fragile democracies in Central America, he said, ''are teetering on the edge of continuing to support the United States."

Portman and Agriculture Secretary Mike Johanns have been meeting this week with lawmakers from sugar-growing states and representatives of the sugar industry in an attempt to mollify their fears that increased imports from CAFTA countries, while small, would open the way for a foreign onslaught on the industry.

Two senators who had previously criticized the agreement, Agriculture Committee chairman Saxby Chambliss, Republican of Georgia, and Senator Norm Coleman, Republican of Minnesota, said yesterday that the administration concessions to protect the industry were enough to win their votes. Those included a program to determine whether a sugar-based ethanol initiative is feasible.

Senator Craig Thomas, Republican of Wyoming, whose state is a big sugar-beet grower, said yesterday that he voted against the agreement in the Finance Committee because attempts to broker a deal with the industry had not succeeded. He chided the administration for not moving sooner to find a solution.

The top Democrat on the committee, Senator Max Baucus of Montana -- which grows sugar beets -- opposes CAFTA, breaking with his usual support of trade agreements.

In addition to saying that the agreement is bad for the sugar industry, he criticized the administration for not consulting more with Congress and for rejecting a proposal to help US service industry workers who lose their jobs because of foreign competition.

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