CAFTA Sent to Congress for Final Approval

The future of U.S. trade policy now sits in the hands of D.C. legislators. On Thursday President George Bush sent the Central American Free Trade Agreement to Congress for final approval.

Wrangling is expected on both sides of the aisle, with several sugar state legislators against or undecided on the agreement. Trade Promotion Authority requires a vote in 90 legislative days.

U.S. Trade Representative Rob Portman says momentum is building on Capitol Hill to get the needed votes for passage. "We've made excellent progress - with bipartisan majorities in both the Senate Finance Committee and the House Ways and Means Committee approving the bill last week," he says. "We still have a lot of work to do, but we cleared a major hurdle last week."

To keep momentum going, the Administration had wanted Congress to cast the vote before the Fourth of July recess. The strongest opposition still comes from the sugar industry and may require some deal making to get 10 to 15 House Republicans from sugar states on board.

The Administration floated a compromise on Thursday to enforce a 1.5-million-ton ceiling on sugar imports through 2007 by compensating foreign producers using cash or commodities controlled by the Commodity Credit Corporation.

The United States is a net sugar importer, with most of the sugar imports coming from Mexico, Dominican Republic, Brazil, Guatemala, Australia, Costa Rica and El Salvador--many that are included in CAFTA. "CAFTA increases their right to sell to us, but still limits it," says Pat Westhoff, program director for Missouri's Food and Agricultural Policy and Research Institute.

Providing a $1.50 tax credit for every gallon of ethanol made from sugar is another proposal. Critics say it would give sugar an unfair advantage in the ethanol market with the current 51-cent per gallon ethanol credit for any commodity that can be used to make ethanol. Corn grower groups were also not in favor of the idea.