Did the Bush administration win the battle and lose the war in its two-vote victory on the Dominican Republic-Central America Free Trade Agreement? Any hope U.S. officials had for expanding NAFTA and DR-CAFTA to the rest of the Americas may have evaporated in the heat of the midnight vote that might have been even closer than the 217-215 margin in the House.
After the vote, Rep. Charlie Taylor, R-N.C., who was listed as not voting, was saying his should have been registered as a no vote. Taylor’s 11th District is home to a number of struggling or closed textile mills. Other congressmen also reportedly were persuaded to abstain.
Monday morning quarterbacks are saying the vote means chances are slim for passage of a new Free Trade of the Americas Agreement after what the House and Senate (which passed the legislation 54-45) went through to pass DR-CAFTA.
If Congress barely approved an agreement with the CAFTA countries, whose total economic output is about equal to that of the city of Baltimore, “the possibility that the administration could get a deal approved with economies that would actually impact the United States doesn’t pass the laugh test,” one analyst said.
Some are also questioning what the close vote means for the Doha Round of the World Trade Organization, which has been on rocky ground since Brazil and the other Group of 20 developing countries nearly derailed the negotiations at a 2003 ministerial meeting in Cancun.
U.S. Trade Representative Rob Portman made much of the negative signal a DR-CAFTA failure would send to the WTO negotiators prior to the vote, but some analysts were asking how countries will react to a vote that could just as easily swing the other way.
Latest reports indicate Doha Round negotiators continue to make little progress toward a framework agreement for the next WTO ministerial conference, scheduled for Hong Kong in December. The main sticking point — farm subsidies.
Subsidies played almost no role in the DR-CAFTA debate although Central America’s farmers have said they fear they will lose markets to subsidized U.S. farm products. Instead, concerns China would transship textiles and apparel through loopholes in DR-CAFTA remained the biggest obstacle for many congressional opponents.
The National Council of Textile Organizations and the National Cotton Council said they were satisfied with administration assurances those would be closed, but the National Textile Association continued to cite specific shortcomings almost up to the moment of passage.
One irony came from legislation the House passed the afternoon it approved CAFTA-DR. The law, authored by Rep. Phil English, R-Pa., would apply countervailing duties to exports from non-market economies, such as China. Democrats opposed it because it was weaker than an earlier version that applied the duties unless China revalued its currency.
With supporters arguing that China was doing just that, the People’s Bank of China announced that it’s 2 percent upward revaluation of the yuan was a one-time event and that it planned no more changes.