Mr. Speaker, I rise in strong support of the Dominican Republic and Central American Free Trade Agreement and urge my colleagues to join me in its passage in the next week. Both the strength of our economy and the jobs available to our own…
Mr. Speaker, I rise in strong support of the Dominican Republic and Central American Free Trade Agreement and urge my colleagues to join me in its passage in the next week. Both the strength of our economy and the jobs available to our own people depend on our ability to gain access to new markets and offer products that are price competitive, and quality competitive. Without greater access to the global market, it is our people that pay the price. The DR-CAFTA agreement will, for the very first time, allow U.S. goods to flow into the Central American countries without tariffs, just the way Central American goods flow into America without tariffs. It merely levels the playing field.
Furthermore, it will allow us to modernize the partnership between the United States textile industry and the Central American countries. Through this partnership we can compete with China. If we lose this partnership and the opportunity to modernize it, then textiles will go to China. They will take jobs from the Central American countries and that will take jobs from America because this partnership uses entirely American yarn, and China is unlikely to do that. So not only would our goods flow into these Central American countries without tariffs, but by modernizing the textile partnership between the United States and the Central American nations we save jobs in both countries and keep ourselves competitive with China.
Finally, this agreement helps strengthen fledgling democracies and economies that at one time were the center of civil war, terrible unrest, terrible suffering and great poverty. Through the development of their democracies and their economies, their people are beginning to do better, and by supporting that growth we can stem both legal and illegal immigration from those nations, which we would like to do.
I strongly support CAFTA, as do the majority of producers of American products from manufactured products to agricultural products, because the agreement levels the playing field for workers by immediately reducing tariffs imposed on exports to Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. It zeros out many tariffs immediately, while others are reduced the first year by 80 percent. This is manufacturers, agriculture products, everything across the board.
Currently, imports from CAFTA countries enter the United States duty free, but of course our goods are not allowed to go back duty free. This is a great leveling of the playing field and will increase exports from the United States to the Central American nations.
It may surprise you to hear that Central American countries are my home State of Connecticut's largest export market for crops. Connecticut's dairy farmers will gain immediate duty free access to the Central American markets for dairy products, and all tariffs will be phased out over time. That is exactly why the American Farm Bureau has endorsed CAFTA.
Now there has been some discussion about the labor requirements, the labor provisions of CAFTA. In fact, this agreement has been roundly criticized by Members of this body who voted overwhelmingly for the agreement with Morocco and the agreement with Jordan. And yet this agreement is far tougher on labor standards and far stronger on enforcement.
I am proud to say that under this agreement, after a year's work between the Development Bank and the ILO to evaluate carefully these countries' labor laws and to upgrade those laws, to evaluate carefully their ability to enforce those laws and what had to be done to strengthen enforcement, after that year of work, all that work is embodied in this Central American agreement, the CAFTA agreement. Consequently, this agreement will enforce laws that meet the ILO standards in all these countries, 100 percent in most of them and in two of them there are constitutional provisions that essentially make it equivalent to 100 percent. So the labor laws meet high standards and through this agreement enforcement will meet high standards.
We not only commit money to those standards but we creatively approach for the first time the issue of enforcement. First of all, under the old agreement, if the Central American countries did not live up to their obligations to make progress in the area of labor laws, all we could do was completely cut off all trade agreements. That nuclear, that draconian option was never in the whole 22 years used. It did not work.
So in this agreement we have the right to levy stiff monetary fines, up to $15 million per year per violation; and if that does not work, we can take away their trade benefits. But meanwhile these fines will go into a special fund to be used with American oversight and American agreement to solve specific labor problems to strengthen specific enforcement measures and to make the lives of the workers in these countries better.
Not only do we have flexibility and enforcement and new funding from the penalty system, but our country has committed $180 million dollars to enforcement.
In sum the DR-CAFTA agreement will for the first time allow U.S. goods greater access to central American markets close to our country, allow us to modernize our textile partnership to compete directly with China, and help strengthen the fledgling democracies and economies of our southern neighbors which alone will stem immigration--legal and illegal--from those nations.