“Michigan Likes It”

Analysis:

In the Friday July 29 edition of the Grand Rapids Press, this article appeared in the business section under the title “CAFTA victory could spur larger trade zone.” This article is partly written by an Associated Press reporter and partly by a Grand Rapids Press reporter. The first half of the article gives a very cursory description of CAFTA and frames it as a part of the effort to create the much larger free trade area of the Americas. The second half of the article titled “Michigan likes it.” This section quotes several Michigan people such as Steve Van Andel, Former governor John Engler who is now chairman of the national Association of Manufactures, and Tom Reardon, executive director of the Business and Institutional Furniture Manufacturers Association. The only voice quoted as critical of CAFTA is Venezuelan President Hugo Chavez. No Michigan voices critical of CAFTA are put forth, despite the fact that CAFTA was opposed in Michigan by labor unions, environmental groups, some agricultural sectors as well as many citizens in general.

Story:

Washington — Free trade supporters cheered the Central American trade pact’s passage Thursday, but said the narrow victory may provide little momentum for reaching their larger goal: a trade zone spanning the Western Hemisphere.
The Republican-controlled House barely approved the agreement known as CAFTA on a 217-215 vote early Thursday morning. President Bush and Vice President Dick Cheney made a rare joint visit to the Capitol to lobby for the bill, and Republicans held the floor vote open beyond its allotted 15 minutes until they had secured a majority.
The senate already has approved CAFTA, which will end most tariffs on goods traded among the United States and the Dominican Republic, Costa Rica, El Salavador, Guatemala, Honduras and Nicaragua.
Both supporters and opponents agreed that Bush’s more ambitious goal of creating the Free Trade Area of the Americas would have become unthinkable without passage of the much smaller CAFTA.
While CAFTA covers a region that purchased only $15 billion worth of U.S. goods last year, the Free Trade Area of the Americas would turn 34 countries in the Western Hemisphere into a single trading zone encompassing about 800 million people. It also could deliver a gem to Atlanta: The city is bidding to become the headquarters of the Free Trade Area of the Americas.
“The importance of CAFTA all along has been that it would serve as a wind-up to give [the Free Trade Area of the Americas] momentum,” said Larry Birns, director of the Council on Hemispheric Affairs, a Washington-based research group.
Michigan Likes It

Tom Reardon, Business and Institutional Furniture Manufacturers Association executive director, said it is “tough to predict” what effect, if any, CAFTA’s passage will have on the office furniture industry.

“I wouldn’t be a bit surprised if some West Michigan companies did business in Central America,” said Reardon, who oversees the industry trade group based in Grand Rapids. “Still, it’s going to represent a relatively small percentage of sales.”

The trade agreement made sense to Alticor Chairman Steve Van Andel. “As an American manufacturer and exporter, we support CAFTA, because tariff reduction makes our products more competitive and helps us keep jobs here at home,” he said.

The National Association of Manufacturers applauded the vote, calling it “a big win for the United States, for Central America, and for the world.”

The group is led by former Gov. John Engler.

“The House rejected isolationism,” said Engler, NAM president, in a prepared statement, “and it affirmed that America’s economic future lies with open markets and a level playing field for international trade.”

Looking ahead, the obstacles to the FTAA are immense, particularly because of disagreements between the United States and Brazil. For example, Brazilians “feel wounded by our sugar subsidies and very, very high tariffs on orange juice,” said Edward Gesser, director of the Progressive Policy Institute’s Project on Trade and Global Markets.

At the same time, U.S. citrus growers and sugar producers fear being wiped out by cheap Latin American imports. Indeed, the stiffest opposition to CAFTA came from sugar producers and processors, who objected to the provision allowing a 50 percent increase in U.S. sugar imports over 15 years.

Gresser said another problem is growing anti-Americanism in Latin America. For example, Venezuelan President Hugo Chavez, in his weekly radio and television show, last month labeled FTAA “a perverse proposal of the Americans to turn us definitively into a colony.”

In light of such sentiments, FTAA “is not an easy puzzle to put together,” he said.