The much-opposed Central American Free Trade Agreement (cafta) was approved by the us Senate on June 30, 2005, after a heated debate. The treaty will remove most restrictions on the nearly us$32 million trade of the us with the Dominican Republic, Guatemala, Costa Rica, Honduras, El Salvador and Nicaragua. cafta has witnessed widespread resistance in the Central American nations too (see Down To Earth, 'Pacts opposed', April 30, 2005).
Both Republicans and Democrats doubted the pact's appropriateness, especially for fear it would harm domestic sugar producers and textile manufacturers. They also repeatedly highlighted poor labour-protection laws in Central America. But for president George W Bush the pact is a model for bigger trade deals, which would increase us exports. It also inflates Washington's credibility in international negotiations on ending agricultural subsidies and opening up trade in services. "It will signal to the rest of the world that America's leadership role in trade is being abdicated," said us trade representative Rob Portman. cafta now faces a fight in the us House of Representatives.
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