Following approval by the U.S. Senate of President Bush's Central American Free Trade Agreement (CAFTA), the battle to block the proposed treaty moved to the House of Representatives.

At Graphic Communicator press time, the House was expected to consider the treaty later in July. Under Fast Track trade agreement rules, Congress may only vote it up or down without amending it.

The Senate approved CAFTA by a 54 to 45 vote on June 30. Eleven Democrats voted for CAFTA, and 12 Republicans voted against it.

Opponents of CAFTA–who include U.S. and Central American unions, a broad array of U.S. businesses, and human rights groups–say the treaty, which is modeled on the North American Free Trade Agreement (NAFTA), will weaken incentives currently in force in other trade agreements for Central American governments to improve worker and human rights laws and enforcement.

Opponents also argue that, like NAFTA which regulated trade between the United States, Canada and Mexico, the proposed treaty with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic in the Caribbean will cause even more job losses in the United States and Central America, drive down wages in all the countries involved, and further escalate the United States' mounting trade deficit.

AFL-CIO Pres. John J. Sweeney said CAFTA would have failed in the Senate had it not been for "last-minute deals that do nothing to address its deep flaws." He said scores of Democrats and Republicans who traditionally have supported free trade agreements "came to the same conclusion on CAFTA: It's a raw deal for working families here and in Central America. We commend the senators who took a principled stand and rejected President Bush's deal-making to side with working families."

"America's working families want fair trade that lifts living and workplace standards in the U.S. and in Central America, not another give away to giant corporations that will sell out America's jobs while accelerating the deterioration of wages and working conditions in Central America," Sweeney said. "CAFTA is a step back on protecting the rights of workers and represents a dangerous precedent for future deals."

Teamsters General Pres. Jim Hoffa said the "laughable and predictable last-minute attempt to paper over CAFTA's flaws with a worthless side agreement on labor protections is predestined to fail. This agreement will do nothing to improve the wages, benefits, workplace safety, labor rights, and standards of living for Central American workers. And here in the United States, Teamsters and other working families will not be fooled by the sham. As with China's Permanent Normal Trade Relations status, the CAFTA side deal adds pages to CAFTA and nothing more."

Hoffa warned that "the Teamsters will fight to protect U.S. jobs from being sold overseas to the lowest bidder. Nobody gets a pass when it comes to selling out my members' jobs and accelerating the global race to the bottom."

"It is time for the United States to have a trade policy that makes moral and economic sense for all workers," Hoffa said. "As long as these agreements serve the interest of ruthless multinational corporations at the expense of working men and women, the U.S. and its trading partners will never truly benefit from trade."

The Teamsters are urging members to participate in the "Take Action" campaign to stop CAFTA. Call, write, fax, or send an e-mail to your representative in the House and ask them to oppose CAFTA. Or go to www.unionvoice.org/teamsters/home.html for information updates and to send a message to your representative.

Among the Republicans opposing CAFTA in the House is Rep. Walter B. Jones Jr. (N.C.). Jones said North Carolina's textile factories and workers have been devastated by foreign competition. "Enough is enough," Jones said. "We are losing the manufacturing base of the country."

The business lobby is divided on CAFTA. Some 23 business groups, including the U.S. Business and Industry Council and the National Textile Association, sent a letter to Bush on June 21, urging him to withdraw CAFTA "as the first step in creating a wholly new U.S. trade policy–one that promotes, not decimates, domestic manufacturing and the middle class along with it."

"Although you promise that CAFTA will open big new foreign markets for U.S.-made goods, the opposite is clearly true," the business groups' letter said. "The results of the outsourcing deals that have dominated U.S. trade policy over the last 15 years are in: gargantuan trade deficits, shuttered factories and formerly middle class Americans sliding down the job and wage scales. CAFTA is simply the latest in this series of outsourcing deals that are gutting our domestic manufacturing base."

A delegation of legislators from El Salvador, Guatemala, Honduras, and Nicaragua visited U.S. lawmakers on Capitol Hill to urge them to reject CAFTA.

Salvador Arias, a member of El Salvador's Legislative Assembly, said that "CAFTA's main objective is to support big business, and it will upset the political and economic stability of Central America." He said CAFTA would cost Central America some 500,000 jobs–primarily in the agricultural sector–in just a few years.

House members are under intense pressure from the Bush administration and the big business lobby to approve CAFTA. The administration sent the secretaries of State, Defense, Commerce, and Agriculture and the U.S. trade representative to lobby House and Senate members to support the trade deal.

Also in mid-June, The Washington Post reported that Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, threatened lawmakers with the cutoff of campaign contributions if they oppose CAFTA. "If you are going to vote against it, it's going to cost you," Donahue said.

The Washington Post reported that business groups with the most to gain from CAFTA include the pharmaceutical, high tech, and telecommunications industries and exporters such as the National Pork Producers and Procter & Gamble.

According to a recent AFL-CIO report, "CAFTA: A Two-Way Street to Job Loss in the Americas," the experience with NAFTA illustrates the potential results of CAFTA. For example, the report said, the U.S. trade deficit with NAFTA trading partners Mexico and Canada was $9 billion in 1993. By 2004, that trade deficit was $111 billion.

The Economic Policy Institute estimates that nearly 900,000 net jobs were lost due to the growth in the NAFTA trade deficit through 2002.

The AFL-CIO report said that NAFTA contributed to the stagnation of real wages and the increase in income inequality in several ways. Workers who lost manufacturing jobs with good wages and benefits to NAFTA often found replacement jobs with lower pay and fewer benefits, such as health insurance and pension plans.

A Cornell University survey showed the incidence of U.S. employers using threats to shift work to maquiladora factories in Mexico to defeat union organizing campaigns greatly increased after NAFTA. Driving down the rate of union membership and union collective bargaining agreements drives down wage rates for workers in general, according to economists.

Like Mexican workers and farmers under NAFTA, Central American workers and farmers are expected to lose under CAFTA, the AFL-CIO report said. The report cited a World Bank estimate that one in 10 households in Nicaragua and one in six in Guatemala will end up being net losers from agricultural trade under CAFTA.

The AFL-CIO's report also noted that, like Mexican workers, Central American workers will not be able to stand up to competition with China without a substantial loss in wages. Workers in Central American countries earn two to 10 times as much as their Chinese counterparts, the report said.

The AFL-CIO report concluded: "Displacement of rural populations, disappointing job creation in manufacturing, unmitigated competition with China, and the failure to protect fundamental workers' rights have all contributed to a decline in real wages and an increase in poverty in Mexico under NAFTA.

"Rather than learn from these failings by negotiating a new kind of trade agreement with Central America that would create good jobs, guarantee workers' rights, and help build the foundation for a thriving middle class in the region, the administration has duplicated NAFTA's flaws in CAFTA."

"Unfortunately, the results in Central America are all too likely to mirror Mexico's experience and bring the region no closer to the sustained economic development and poverty reduction its workers and their families need," the AFL-CIO report said."