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#1564: Lott Stalls Caribbean Trade Bill (fwd)

From: Merrill Smith <advocacy@bellatlantic.net>

The following ran on the December 17 issue of Haiti Online

US-politics: Senator Lott Stalls Caribbean Trade Bill 

Merrill Smith 
Haiti Advocacy, Inc. 

Washington, 12/17/1999--Progress toward getting 'CBI enhancement' passed
in Congress has stalled. The legislation would reduce U.S. tariffs to
products of the Caribbean and Central America (i.e., the countries of
the "Caribbean Basin Initiative" or CBI) including Haiti. It passed the
Senate, November 3, by a stunning 76-19 margin as part of a package
including the African Growth and Opportunity Act.(1) There are important
differences between the House and the Senate versions requiring the
convening of a Conference Committee to work out a compromise (Haitian
Times, Nov. 24-30, p. 26). Senate Majority Leader Trent Lott (R-Miss.),
however, has shown no willingness to negotiate. 

The major dispute concerns content rules. The Senate version would
require the countries of the region to use American-made fabric in order
to avoid high U.S. tariffs on the clothing they produce. The House
version, on the other hand, would allow the countries to use their own,
locally produced textiles, a key 'stepping stone' industry for
developing countries.(2) Rich country protectionism in textiles and
agriculture cost the developing world some $60 billion per year -- more
than all 'foreign aid' combined. 

Protectionism is Rising... 

The original House version also would have allowed the use of limited
quantities of 'non-originating' textiles -- fabric produced outside the
region and the U.S. This had been controversial but the Sponsor of the
House version, Rep. Philip Crane (R-Ill.) has indicated a willingness to
make significant compromises in order to reach an agreement. Sen. Lott,
on the other hand, refuses to budge on the Senate's U.S.-content rule.
"It's my way or the highway!," said a Senate staffer, characterizing the
Republican leader's position. 

The U.S. content rules in the Senate version have strong support from
only a handful of Senators, chiefly Sens. Ernest Hollings (D-SC) and
Jesse Helms (R-NC). The Senate rules are mainly supported by powerful
corporate interests in the highly protected U.S. textile industry,
including Dupont, Fruit of the Loom and the American Textile
Manufacturers Institute. These interests stand to reap a windfall from
U.S. fabric mandates combined with apparel merely assembled in the
region. They greatly fear American consumers having the option to
purchase clothing made with Caribbean Basin textiles. The average
American family of four spends an estimated $700 per year in higher
clothing prices due to protectionist policies -- a highly regressive
'tax' that hits the poor hardest but benefits the textile lobby

... But Resistance is Building 

The democratically elected governments of the Caribbean and Central
America are unanimous in their support for CBI enhancement, as are labor
federations representing the majority of organized labor in the region.
And, according to recent polls (Haitian Times, Dec. 8-14, p. 23),
two-thirds of the American people strongly favor lowering trade barriers
to poor countries. On November 8, Haiti Advocacy ran a full page ad in
the Congressional newspaper Roll Call, endorsed by more than a hundred
religious, humanitarian and civic organizations specifically calling
upon conferees to eliminate the content requirements. 

Labor and environmental concerns addressed 

Both House and Senate versions of the CBI portion contain labor
standards conditions that could result in the raising of trade barriers
where they are not met. The environmental impact of the legislation
would be positive. Apparel and textiles are environmentally benign
industries. And this is especially so in comparison with alternative
sources of employment in the region, e.g., cutting down trees to make
charcoal, etc. More significantly, however, economic growth is perhaps
the most important factor in raising both labor and environmental
standards in developing countries. 

American workers would also benefit by increased trade with the region
which spends the bulk of its foreign exchange on U.S.-made goods. Some
jobs would be lost but others would be gained and studies show that jobs
in the American export sector pay some 15% higher than average. U.S.
unemployment is at a historic low but Trade Adjustment Assistance is
also available to help smooth the transition. The American textile and
apparel sector union, on the other hand, would lose members, dues and
clout -- even if its individual members get better jobs -- and,
understandably, opposes any such legislation. 

Where do we go from here? 

As noted in the Haitian Times Dec. 15-21 editorial, "Expanded trade can
only benefit the Caribbean." The ball would appear to be in Sen. Lott's
court but, actually, it is in ours. Readers can contact their Senators,
especially their Republican Senators, and ask them to speak to Sen. Lott
and convince him to compromise. 

President Clinton can also play an important role in moving the
negotiations forward. Although he failed to get tariff reductions for
Least Developed Countries at the WTO, an Africa/Caribbean Basin trade
bill would accomplish many of the same objectives. Clinton supported the
House version the past but has not yet warmed to the fight this year. 

The protectionists are mobilized. The battle is joined. We have the
issues and we have the arguments. Now is the time to make our voices

(Texts of the various versions, summaries, roll call votes and other
materials can be found on the Haiti Advocacy web site at

1. The package is called the "Trade and Development Act of 1999" and
still goes by the old House number of the Africa bill, HR 434 (as an
"Engrossed Senate Amendment"). The CBI portion is Title II thereof and
called the "United States-Caribbean Basin Trade Enhancement Act." 

2. The House version is called the "Caribbean and Central America Relief
and Economic Stabilization Act" HR 984. It has been approved by the Ways
and Means Committee and has 66 Co-sponsors including about half of the
Congressional Black Caucus. posté le 12/18/1999
Merrill Smith
Haiti Advocacy, Inc.
1309 Independence Avenue SE
Washington DC 20003-2302
(202) 544-9084
(202) 547-2952 fax