Nebraska Needs CAFTA
This month, the Senate and House will begin debate on the Central America Free Trade Agreement (CAFTA). CAFTA will be the most important trade agreement considered by this Congress and it has direct consequences for Nebraska. Passage of CAFTA means increased markets for Nebraska's agricultural products and manufactured goods to the nations of Central America (the Dominican Republic, Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua). Already, 47,000 Nebraska jobs are supported by exports of farm products. CAFTA means more of these jobs across Nebraska and enhanced opportunities in Nebraska communities that desperately need them.
Passing CAFTA will further open new markets for Nebraska beef, corn, soybeans and other Nebraska products by lowering and eliminating tariffs on U.S. goods in CAFTA countries. Currently, U.S. goods exported to CAFTA countries face significant tariffs. Despite these tariffs, Nebraska exported over $19.5 million worth of goods to CAFTA countries in 2004, according to the Department of Commerce. With these tariffs eliminated, this region provides significant potential for states like Nebraska which depend on our ability to export our products. The Office of the United States Trade Representative views Central America as a larger market for U.S. products than India, Indonesia, and Russia combined.
All previous trade agreements have benefitted Nebraska. Since the North American Free Trade Agreement was signed in 1993, Nebraska's combined exports to Canada and Mexico have increased by more than 160 percent. In the first year of the U.S.-Chile Free Trade Agreement, Nebraska's exports to Chile grew 3 percent.
There are those who have argued that there is a danger to the U.S. sugar industry if CAFTA is passed into law. They are worried about sugar from the Dominican Republic and Central America crowding out domestically produced U.S. sugar. These fears, while understandable, don't hold up against the facts. Under the current U.S. Farm Bill, Congress set an import ceiling of about 1.4 million metric tons of sugar. The domestic sugar program is unaffected when imports are below this limit. Currently, the U.S. is not close to exceeding that ceiling. According to the U.S. Trade Representative, in the first year of the agreement increased access to the U.S. sugar market will be equal to little more than one day's sugar production in the United States.
CAFTA has stronger protections for workers than any other Free Trade Agreement. It has a three-part strategy that will ensure effective enforcement of domestic labor laws, establish a cooperative program to improve enforcement of domestic labor laws, and enhance the ability of Central American governments to monitor and enforce labor rights.
Trade is an opportunity, not a guarantee. CAFTA is supported by over 50 agricultural industry and farm groups, including the Nebraska Farm Bureau and the Nebraska Corn Growers. President Bush and Secretary of Agriculture Mike Johanns are working with the Congress to get CAFTA passed this year.
Few issues considered by this Congress will have a more direct impact on Nebraskans than CAFTA. Ultimately, the argument for CAFTA is not about numbers on a page or statistics, it is about Nebraska families and communities that need the opportunities provided by these markets to grow and remain competitive. CAFTA is good for Nebraska.