July 1, 2005

House panel approves Central America trade pact

WASHINGTON (Reuters) - A free trade agreement with CentralAmerica was headed toward a bruising battle next month in theU.S. House of Representatives after winning approval onThursday in the Ways and Means committee.

The panel voted 24-11 in favor of the U.S.-Central AmericanFree Trade Agreement, or CAFTA, which would tear down tradebarriers between the United States, Costa Rica, El Salvador,Guatemala, Honduras, Nicaragua and the Dominican Republic.

The committee tally could change because some members werenot present and have until later Thursday to vote.

The full Senate was expected to approve the pact onThursday, one day after the Finance Committee gave its OK.

The outlook for the agreement was less certain in the fullHouse, which was expected to vote on CAFTA when lawmakersreturned in July from a weeklong Independence Day break.

"The real challenge is going to be on the floor," said Rep.Ben Cardin, a Maryland Democrat who joined most fellow partymembers on the Ways and Means panel in opposing the pact.

"It's going to be a very close vote," he said. "If themembers vote the way they have expressed themselves, I thinkCAFTA will not be approved. Obviously, the administration isdoing what they can to peel off votes" and win approval.

House Ways and Means Committee Chairman Bill Thomas, aCalifornia Republican, said expected Senate approval of CAFTAwould make it easier to win in the House.

He expressed confidence there would be "enough" votes topass the bill, even if the victory margin is slim.

Opponents estimate that as many as 190 Democrats and 40Republicans are currently opposed to CAFTA, more than the 218need to defeat the pact. Supporters say those numbers includeat least some undecided members who could still be swayed.

The Bush administration has struck a number of deals inrecent days to ease the way for Senate approval.

In response to Democratic complaints that CAFTA's laborprovisions are not tough enough, it has pledged to support $160million in funding over the next four budget years to help theCAFTA countries enforce their labor and environmental laws.

It has also tried to allay sugar industry concerns aboutthe pact by promising action, if necessary, to keep overallsugar imports below a certain farm program threshold.

It would do that by paying CAFTA countries, using U.S.agricultural goods, not to ship sugar to the United States orby purchasing the sugar and making it available to be convertedinto nonfood uses, such as ethanol.

Rep. Mark Foley, a Florida Republican who voted for CAFTAin the Ways and Means Committee but hinted he may oppose it onthe House floor, said he would continue pushing the Bushadministration for a better sugar deal.