We have friends on both sides of the debate over the Central America Free Trade Agreement, which would provide trade preferences between the United States, the five Central American nations, and the Dominican Republic. We understand and share the frustration of many internationalist Democrats, who have come to view cooperation with the Bush administration and House Republican leaders as nearly impossible on trade or any other issue. But the consequences of CAFTA's fate -- for the American economy, for Central America, and for hemispheric relations generally -- will remain long after the current GOP regime in Washington has become a bad memory. As Representatives Bill Jefferson (D-LA), Henry Cuellar (D-TX), and others argue, CAFTA's passage is in the national interest and deserves Democratic support and involvement.
Why? Four reasons for CAFTA are especially important.
First, the United States needs to open new markets and increase exports if we are ever to regain the economic growth levels of the 1990s. CAFTA is a small part of that process, which must ultimately include broader multinational agreements and vastly improved enforcement. But CAFTA could still make a serious and valuable contribution. The six CAFTA partners are small countries, but they already absorb $15 billion annually in U.S. exports, including a quarter of all American textile exports. Rejecting CAFTA will hurt these American exporters, and will not provide any relief for import-sensitive U.S. textile producers; foregone textile imports from Central America will almost certainly be replaced by imports from Asia. Approving CAFTA will cut tariffs, open markets, and provide a modest but important boost to American manufacturing exporters.
Second, the United States has a tangible political and moral stake in our partners' success. All six today are peaceful, democratic nations -- and bipartisan American trade policy deserves some of the credit. The Caribbean Basin Initiative, a trade preference program dating back to 1985, helped bring new urban industries to Santo Domingo, Managua, San Salvador, San Pedro Sula, and many other Central American and Dominican cities. Central American clothing factories now employ about half a million people, and often provide the first jobs for hundreds of thousands of young women moving out of impoverished villages. This source of employment has helped Central America make a crucial transition from the wars, armed insurgencies, and military repression that characterized the region in the 1980s.
CAFTA will help make sure this transformation continues as the economic environment for the region gets a bit tougher. With the recent elimination of global textile trade quotas, large Asian countries -- not just China, but Vietnam, India, Indonesia, and others -- can easily eclipse the smaller industries of Central America. By broadening the region's duty-free privileges, making them permanent, and providing more help to rural exporters, CAFTA will help keep the six partners competitive, and help them speed up market opening, reform, and diversification into higher-value industries.
Third, Democratic support for, or at least an open attitude towards, CAFTA can and should be used as leverage to make the agreement better. In what is likely to be a close vote in both Houses of Congress, Democrats could be in a position to demand better policies to "expand the winner's circle" at home, including broader eligibility for American workers for the Trade Adjustment Assistance program, which provides living assistance and retraining to workers displaced by trade. They could also pursue assurances that the Bush administration, cooperating with the International Labor Organization, will make serious efforts to enforce the agreement's workers' rights provisions, and to build capacity for labor and environmental regulation in Central America and the Dominican Republic. None of these improvements can be secured by categorical opposition to CAFTA.
Fourth, the United States has strategic interests at stake that go beyond exports and beyond the partners themselves. The great 20th-century Democratic presidents all viewed democracy and economic integration in the Western Hemisphere as essential to the prosperity and security of the United States. Franklin Roosevelt made this point in the 1930s, calling for hemispheric trade integration as part of the Good Neighbor Policy. John Kennedy did the same in the Alliance for Progress, as did Bill Clinton in the Summits of the Americas.
In key parts of Latin America, the future of the hemispheric alliance is in serious question. Argentina continues to struggle after the financial crisis of 2001; all of Latin America remembers the Bush administration's frivolous approach to that event. Further north, Venezuela is experimenting with semi-authoritarian populism, and elected governments have been forced from office in Ecuador and Bolivia. In such an environment, the CAFTA debate -- as the major U.S. debate on inter-American relations of this decade -- takes on additional importance. Latin American governments, news media, and citizens will closely watch America's response to an agreement with six countries that remain committed to the principles of democratic development and hemispheric cooperation.
None of these four reasons make the CAFTA decision an easy one for Democrats. The administration and Congressional Republican leaders, over five years of ultra-partisan approaches to issues ranging from ethics and judges, to Medicare and Social Security, have made it hard for Democrats to take the long view. But our hope is that Democrats will take that long view, consider all the implications for our national interests, and remain true to their heritage as the party of economic opportunity and peaceful internationalism.
