CAFTA Bill passes House by 2 votes

Monumental efforts have produced a victory—of sorts—that gives little comfort. The narrow passage of the CAFTA bill poses a worrying question about Congress’ willingness to make changes in the future to secure much bigger rewards for U.S. trade The biggest concern is the apparent reason for the victory even by a narrow margin was not that trade with the efficient sugar producers of Central America would help the beleaguered sweetener users in the USA or that access to the low-cost garment producers would be a boon to U.S. consumers. The trade benefits were not enough as far as Congress was concerned. bq. In the end, it was the national security argument—that rejection of the deal would further impoverish the region, undermine their democracies and exacerbate the flow of illegal immigrants into the United States—that appeared to persuade some wavering members.(“CNN”:http://www.cnn.com/2005/POLITICS/07/27/bush.cafta.ap/) The biggest concern for any observer has to be the growing reluctance of Congress—whose members are running for office every day of their two-year term—to look beyond the producer interest in trade, or to accept that trade plays a “tiny part”:http://www.ppionline.org/ppi_ci.cfm?contentID=253391&knlgAreaID=108&subsecID=127&FREM=Y&sid=21573&mid=13281—perhaps 2 to 3 percent—in total employment churn (thanks to “Ben Muse”:http://benmuse.typepad.com/ben_muse/2005/06/ppi_traderelate.html for that pointer).[1] To win this fight on debateable grounds of regional security rather than on objective grounds of the economic benefits might be just the nature of trade politics. But it foreshadows a much harder struggle for approval of a global trade deal that will offer much more to the USA in terms of gains—some of the “biggest net gains(Anderson and Martin, World Bank)”:http://siteresources.worldbank.org/INTRANETTRADE/Resources/239054-1109114763805/Ch12_AndersonMartinMensbrugghe.pdf [PDF file, about 400k] in income from in agriculture for example—but only at the cost of some trade adjustment. What will Congress say if faced with opportunities to make a big difference to the USA’s future economic growth? fn1. Of course the U.S. economy has been adding jobs on a net basis since the business cycle turned in late 2001, not losing them to Mexico, Canada, China or anywhere else. See “this chart”:http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=CES0000000001&output_view=net_1mth from the Bureau of Labor Statistics

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p align=”center”> Bureau of Labor Stats data on job growth (thousands) in USA

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