[Mb-civic] US Senate backs Central America trade pact Ftimes

[Michael Butler]

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US Senate backs Central America trade pact
>By Edward Alden in Washington
>Published: July 1 2005 00:43 | Last updated: July 1 2005 04:53
>>

The Bush administration won its second important trade victory in a day,
after the Senate late on Thursday night approved a free trade agreement with
Central America. Earlier in the day the Senate had put off a contentious
vote threatening sanctions against China.

Senators Charles Schumer and Lindsey Graham said they would delay until
October a vote on the China bill, which would impose 27.5 per cent tariffs
on Chinese imports if Beijing does not revalue the renminbi within six
months. The decision, which was applauded by business groups, gives the Bush
administration breathing room in its quieter efforts to persuade China to
address the currency issue.

The Senate also approved the Central American Free Trade Agreement (Cafta),
overcoming a big hurdle in the most contentious US debate over a trade deal
since the North American Free Trade Agreement with Mexico.

The pact faces a much tougher road in the House of Representatives, but its
prospects were boosted on Thursday when it was approved on a 25-16 vote by
the House Ways & Means committee. Two of the committee's 17 Democrats voted
for the bill, as did several Republicans from sugar-producing states.

The sugar industry, which fears new import competition from Central America,
remains a big obstacle to the agreement. But Senator Pat Roberts, a Kansas
Republican and a former agriculture committee chairman, warned the industry
could pay a high price if it blocked the deal, including cuts to its price
support programmes in the next farm bill. "I'm saying to the sugar industry
you may win the battle but you will lose the war."

China also looms large in the House vote on Cafta. Bill Thomas, the
Republican chairman of the committee, said on Thursday he might seek a vote
on legislation to toughen enforcement of trade deals with China in an effort
to win more support for Cafta.
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