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04 May 2005
U.S. Congressman Outlines Benefits of Central American Trade Pact
CAFTA will promote jobs, strengthen democracy, says Brady
The passage of the United States' free-trade agreement with Central America and the Dominican Republic (CAFTA) will create jobs and strengthen democracy in the region, whereas failure to secure legislative approval of the agreement will undermine other trade talks regionally and globally, according to Congressman Kevin Brady.
In May 4 remarks to the Council of the Americas, Brady, a Republican from Texas and member of the House Subcommittee on Trade, outlined the benefits of CAFTA and explained the likely consequences if the accord is not approved.
Brady said CAFTA represents the linchpin of American foreign policy in Latin America. He argued that the agreement will strengthen the proven trade partnership between the United States and its CAFTA partners, will create jobs and will allow the signatory parties successfully to handle global competition, particularly from China in the area of textiles.
"With the global quotas on textiles expired, CAFTA offers the United States, Central America and the Dominican Republic an opportunity to pool our resources and continued strengths," Brady said. "We need the customers this agreement brings, the jobs it will create and the strategic strengths to compete in a changing world where few nations can stand alone."
Beyond the economic benefits of CAFTA, the congressman explained, the agreement would help consolidate the democratic, labor and environmental reforms Central America has achieved in the last decade and would encourage continued progress in these areas.
"CAFTA will stimulate not just growth, but also positive structural change, [by] strengthening the political transformation already under way in Central America and the Dominican Republic toward democracy and market-based economies," Brady said.
In addition to helping the CAFTA countries, he said, the United States must provide leaders elsewhere in the Western Hemisphere with tools such as free trade to ensure the social and economic progress of their people.
To combat poverty and income disparities in the region, the United States must join forces with hemispheric leaders to demonstrate that democracy and free markets can deliver tangible improvements in Latin Americans' daily life, Brady said.
Failure to pass CAFTA, he cautioned, would send the wrong message to struggling democracies and also would undermine other U.S. trade talks in the region and globally.
"If we fail to pass CAFTA, not only we will never get meaningful trade agreements with the Andean Countries, [but] hopes for a Free Trade Area of the Americas and completion of the Doha round of the WTO [World Trade Organization] will be lost," he said. "We must also be concerned about the message that would send to struggling democracies elsewhere around the world, who are doing the hard work of economic reform."
The congressman expressed optimism that when CAFTA comes up for approval before the U.S. Congress, it will have the votes needed for passage.
Following is the text of Brady's remarks, as prepared for delivery:
(begin text)
Congressman Kevin Brady
Address to the Council of the Americas
May 4, 2005
Ali, thank you for the very kind introduction. I appreciate you and the Council of America's inviting me here today to speak to you all. I appreciate the leadership of the Council of Americas in promoting a stronger and more stable hemisphere. Up here in Washington, both Susan and Eric and their team do a great job for you in fighting for this goal. The Council has been an active proponent of a free trade agreement with Central America and was a founding member of the Business Coalition for U.S.-Central America trade from its inception in January 2003.
Most importantly, I appreciate your joining us in Washington, D.C., this week to demonstrate your sincere support of trade. While you are here, I would urge to walk the halls of Congress to meet with members and their staffs to share your support with my colleagues.
I know all of you support free trade so I'd like to focus most of my remarks today on the U.S.-Dominican Republic-Central America Free Trade Agreement. This agreement is the lynch-pin of America's foreign policy for the region and is a future indicator of economic security.
Since you've already had a full day of hearing from Secretaries Rice, Snow, and Rumsfeld, after I finish my comments, I'd welcome the opportunity to answer your questions.
For more than 20 years, Republicans and Democrats have joined together to make the United States a partner in the economic and political development of the Central America and the Caribbean countries. In the past, this partnership was vital in replacing civil wars and dictatorships with stable democracies and increased economic opportunities.
The U.S.-Dominican Republic-Central America Free Trade Agreement embodies the vision of seven presidents -- each committed to raising the dreams and the living standards of the people they lead.
This accord balances the interest of seven unique countries and economies - no easy task. For America, this is the first to tie so many partnering nations into one strong and growing marketplace.
From America's standpoint, our future prosperity depends upon finding new customers to buy our products.
So this agreement is a 3-for-1 opportunity:
-- First, it opens a major growing market the size of France to American goods and services.
-- Second, it strengthens a proven partnership to compete better against China in the future.
-- And third, it locks in remarkable democratic, labor and environmental reforms that Central America, to their immense credit, has achieved over the past decade.
The bottom line is that this agreement is good for America's farmers, manufacturing workers, technology professionals, our growing service industries and anyone else who's still looking for new customers.
Central America is a proven trading partner.
Historically, for every dollar in products Central America has sold to the United States, it has bought back $1.36. Compared to China's paltry 2 cents on the dollar, it is obvious why we need more trading partners like Central America. Even a member of Congress can do the math on that one.
While on the topic of China, CAFTA demonstrates an important illustration of how our nations must partner up or perish. With the global quotas on textiles expired, CAFTA offers the United States, Central America and Dominican Republic an opportunity to pool our resources and continued strengths. We need the customers this agreement brings, the jobs it will create and the strategic strengths to compete in a changing world where few nations can stand alone.
Just as importantly, we need to cement and encourage the blossoming democracy, the rule of law, the respect for human rights, workers rights and environmental progress that Central America has achieved these past two decades -- with the full support and partnership of the United States.
That continued American commitment to freedom is as every bit as important as the jobs this agreement will create.
To turn our backs now on Central America, as opponents urge, would be to turn our backs on democracy, civil rights and America's own economic future. We'll not do that. As the Wall Street Journal wrote last week, If CAFTA fails because Congress fears competition from El Salvador, imagine what they'll conclude in Beijing.
The problems being addressed by Central American leaders are also being experienced in other parts of the region. The recent turmoil in Ecuador reminds us of the fragility of institutions and the levels of popular dissatisfaction with the pace of economic and social progress. We must give leaders in the hemisphere the tools they need to ensure the social and economic progress of their people. Free trade is one of these tools.
In sum, these countries need and deserve our support. And we need to give them that support in a way that is steadfast and consistent. For too long, our policy toward our neighbors in Central America and the Dominican Republic has been characterized by a pendulum-like swing from moments of intervention and involvement to long periods of ignoring the region.
Implementing CAFTA would show that, when it comes to moving from dictatorship to democracy, the United States will stick it out, working with our partners for the long term. We will show that we will stay the course of a quarter-century of progress, and not turn our backs on free democracies working to complete their transformation to stable and free societies.
If we fail to pass CAFTA, not only we will never get meaningful trade agreements with the Andean Countries, hopes for a Free Trade Area of the Americas and completion of the Doha round of the WTO will be lost. We must also be concerned about the message that would send to struggling democracies elsewhere around the world, who are doing the hard work of economic reform.
America must stand with those who stand for freedom. We must help them demonstrate that freedom and free markets can be a winning model in Latin America, offering more promise and hope than the creeping authoritarianism of Chavez's Venezuela, where a movement away from markets has been accompanied by a populist effort to undermine democracy.
While trade agreements do encourage established businesses to innovate and expand, they also create opportunities for new entrepreneurs and small businesses, and they help workers in these countries by creating new jobs.
This is profoundly important to the region's democratic stability. To continue and strengthen their support for democracy in the region, its people need to see concrete benefits -- tangible improvements in their daily life. Nothing is a better cure for poverty and instability than a good job.
While I am supportive of CAFTA because of the jobs it will create here and Central America, I am supportive of CAFTA because even more importantly, it will fundamentally strengthen democracy. By increasing transparency, CAFTA will reduce corruption and promote fair government regulation. By strengthening the rule of law in the commercial arena, it will give impetus to a more efficient administration of justice more broadly throughout the region. And the disciplines, competition, and increased economic integration brought about by free trade will challenge those economic actors that have grown complacent in captive, uncompetitive markets.
Over the long run, these effects can add up to profoundly change how societies are run. As we have seen in countries such as Taiwan, Japan, and elsewhere, when economies are open and the rule of law is strong, power tends to flow away from oligarchs toward a broader popular mass.
In other words, CAFTA will stimulate not just growth, but also positive structural change, strengthening the political transformation already underway in Central America and the Dominican Republic toward democracy and market-based economies.
In conclusion, today we begin in earnest to tell the story of this far-reaching partnership -- to tell the importance to families and workers in each nation.
I am confident that when the Central Free Trade Agreement comes to a vote in Congress, when the truth outweighs the rhetoric, when those who build jobs triumph over those who build walls -- we will have the votes to pass it.
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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
