It is mighty hard to vote against a trade agreement in a state as dependent on trade as Washington. Upon close examination, however, we...
IT is mighty hard to vote against a trade agreement in a state as dependent on trade as Washington. Upon close examination, however, we need to renegotiate the Central American Free Trade Agreement (CAFTA) to encompass all our state and national priorities, not just a limited few. Global economies are too intertwined to negotiate trade agreements that address only a narrow, one-sided portion of our economies.
Advocates and opponents of CAFTA are realistic about the limited potential for growth in Central America as a result of CAFTA. The combined gross domestic product (GDP) of the six Central American countries in CAFTA is about 50 percent smaller than that of Greater Seattle.
Yet, this should not be a reason to reject this CAFTA, but to recognize its precedent-setting significance for future agreements. This is why I have carefully read CAFTA and discussed it with knowledgeable people representing all sides of the issue. In this regard, CAFTA is both a success and a failure. While CAFTA establishes a gold standard for protecting intellectual property created by local hi-tech companies, it also prevents us from moving forward in preserving labor and environmental standards.
Increasingly, trade agreements involve more than simply reducing market-distorting tariffs for Washington state industries. Efforts such as CAFTA now attempt to harmonize a broad spectrum of legal and economic codes between widely disparate countries — laws that affect intellectual property, privacy, food safety, the environment and labor. Our consideration of trade agreements must now include a rigorous evaluation of how a canvass of national and international values is advanced.
On worker protections, CAFTA steps away from the labor-enforcement standards provided under the Generalized System of Preferences and the Caribbean Basin Initiative — our current trade rules with Central America — by allowing a country to effectively pay itself only a minimal fine should a CAFTA dispute panel find the country has violated its own labor laws.
A recent Department of Labor-commissioned study confirmed that some CAFTA countries already have inadequate working conditions and insufficient laws to deter employers from violations. Yet, CAFTA removes the United States’ ability to use trade sanctions to improve labor standards in Latin America. This diminishes our capacity to ensure that no one country gains an unfair advantage, and that workers both at home and abroad do not get left behind.
A local hi-tech employee recently asked me, “How can we justify keeping trade sanctions for violations of intellectual property rules but divest ourselves of the ability to use trade sanctions to enforce labor rules?” There is no good answer to this.
Trade liberalization also needs to be accompanied by assistance for American workers to compete internationally. The President’s Export Council, which consists of CEOs and a bipartisan group of members of Congress, including me, recommended an extension of Trade Adjustment Assistance (TAA) to service workers, to offer them retraining in the same way that TAA now helps manufacturing workers adversely impacted by trade.
Inexplicably, this administration refuses to take this reasonable step, while at the same time eroding our workers’ ability to adapt to a flexible labor market by cutting worker retraining support, freezing Pell grants, eliminating Perkins college loans, reducing funding for Medicaid and math and science education, and eliminating small-business technology development and commercialization activities.
On the environmental front, CAFTA allows corporations to challenge environmental standards in any of the CAFTA countries and sue its taxpayers for revenues lost due to local enforcement of important environmental laws. Under CAFTA, a foreign manufacturer of the groundwater-contaminating gasoline additive MTBE could sue the United States for its losses and leave us to pay for the cleanup of the mess the company made.
Done successfully, opening markets with Central America can reduce poverty abroad while creating American jobs. Unfortunately, this administration’s “one vote” win strategy does not follow Presidents Clinton and Bush Sr.’s examples of engaging bipartisan partners during negotiations. The result is a one-sided agreement dividing stakeholders and jeopardizing long-term trade.
Passing this CAFTA would yield to the siren call of approving any trade deal, no matter how blighted. I will vote against CAFTA and urge the president to renegotiate a long-term trade policy to benefit future generations in Washington state and Central America.
U.S. Rep. Jay Inslee, D-Bainbridge Island, represents Washington state’s 1st Congressional District.