CAFTA Clears Its Final Hurdle

The DR-CAFTA deal lessens trade barriers, but some call it a threat to the economy and to U.S. jobs.

The controversial Dominican Republic-Central America Free Trade Agreement narrowly passed the U.S. House of Representatives late last week, prompting predictions of expanded exports by the IT industry and warnings by tech worker representatives of lost jobs.

The industry, which had made passage of the agreement, known as DR-CAFTA, a top legislative priority this year, erupted with praise following the vote.

Lauding it for making "one less brick in the wall between U.S. businesses and a truly open, global marketplace," Harris Miller, president of the Information Technology Association of America, said the agreement sets a good example for promoting open markets in other parts of the world.

DR-CAFTA eliminates tariffs and other trade barriers between the United States and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic, saving high-tech exporters an estimated $75 million per year.

Of equal importance to the industry, the deal strengthens intellectual property protections through increased enforcement of software piracy laws.

Opponents charge that the pact will do little to increase trade, particularly because the six trading partners constitute a tiny market.

The U.S. International Trade Commission found that DR-CAFTAs impact on the gross domestic product would be too small to register. The deals greatest impact, opponents argue, will be in protecting the investments of multinational corporations without providing any protections for workers in the United States or Central America.

"These kinds of trade models are a threat to the American middle-class economy," said Marcus Courtney, president of the Washington Alliance of Technology Workers, a Redmond, Wash., chapter of the Communications Workers of America.

"Its not just manufacturing jobs being lost; its new economy, high-tech services jobs."

What worries worker representatives most is the precedent DR-CAFTA sets for similar deals with larger countries.

/zimages/1/28571.gifClick here to read more about tech workers opposition to CAFTA.

"This opens the door for future trade agreements, ones that are much more scary to the American worker than CAFTA," said Kristin Farr, legislative director for the Society of Professional Engineering Employees in Aerospace, in Seattle.

"This is a big deal, but its not anywhere near where the administration wants to go, which is to open the door to China."

Democrats complained that the Bush administration forced the bill through Congress and that the majority prevented the minority from presenting amendments.

Warning that DR-CAFTA does not require the Central American nations to abide by international labor rules, Rep. Nancy Pelosi, D-Calif., said overcoming Democratic opposition and winning passage took "enormous economic resources" on the part of the Bush administration.

The administration approved the agreement in May; the Senate passed it in June.

/zimages/1/28571.gifCheck out eWEEK.coms for the latest news, views and analysis of technologys impact on government and politics.