Just past midnight this morning, the House approved by a single vote -- 217 to 215 -- implementing legislation (HR 3045) for the controversial US-Central America free trade agreement, hours after the President made a rare trip to the Capitol to personally secure the support of wavering Republicans (WTD, 7/27/05). CAFTA links the United States with the much-smaller economies of Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua and the Dominican Republic. President Bush -- after a visit with Republicans early in the day -- worked the phones right up to the vote -- and past it, according to sources. Helping out the Administration case with wavering members were Vice President Cheney and Secretary of State Condoleezza Rice. Also busy in the Capitol throughout the day were his top economic cabinet officers -- including US Trade Representative Rob Portman and Commerce Secretary Carlos Gutierrez.

It was a crucial victory for the Administration's trade agenda. US Trade Ambassador Rob Portman told reporters following the vote he was taking the next flight to Geneva to participate in a critical World Trade Organization meeting aimed at keeping the Doha Development Agenda talks going. He said the world's eyes were focused on the CAFTA vote, adding that he would have had "second thoughts" about going to Geneva if the CAFTA effort had failed.

The victory on CAFTA came from a handful of Republican votes. The deciding vote was cast by North Carolina Republican Robin Hayes -- who switched his vote from "no" to the "yes" column in the last seconds. Rep. Hayes played the same key role in passage of Presidential Trade Promotion Authority five years ago.

202 Republicans 15 Dems Support

In all, 202 Republicans and 15 Democrats voted in favor of CAFTA. Voting against the agreement were 187 Democrats, 27 Republicans and one Independent. Two Republicans did not vote -- North Carolina Rep. Charles Taylor, who had been leaning against the agreement and undecided Virginia Rep. Jo Ann Davis.

President Bush had an unusually tough time gaining Congressional approval of his trade initiative with Central America, which was signed over a year ago. The trade pact ran into stiff opposition early on from Congressional Democrats, who argue CAFTA not only fails to ensure the countries abide by core international labor standards -- but actually allows them to take a step back from the worker rights requirements of the Caribbean Basin Initiative trade preferences program.

But CAFTA also ran into trouble from opposition by US textile and sugar producers -- forcing the Administration to make some special deals in order to win over votes. In a closed-door meeting with Republicans yesterday morning, President Bush sought to win over conservatives by stressing the national security dimensions of CAFTA -- particularly the need to support the young, struggling democracies of the region. He also pointed out that most of the Central American countries strongly backed the US war on terrorism and sent troops to Iraq -- a fact that seemed to have particular resonance with some undecided members, according to participants in the meeting.

In a highly rancorous floor debate, Democrats accused the White House and House Republican leaders of buying votes, because they could not sell the trade agreement on its merits. But it could have been an easy sell if the Bush Administration had worked with Democrats to address their concerns about the labor provisions, House Ways and Means ranking Democrat Charles Rangel (NY) said.

Following the vote, Ways and Means Chairman Bill Thomas (R-Calif) said CAFTA was such a hard- won battle because protectionist forces in the Democratic party had decided to make it their "last stand." He said he does not expect future trade agreements -- like the one with Bahrain (WTD, 7/12/05) -- to be difficult. He said he expects Congress will take up the measure in the fall.

Speaking to reporters earlier in the day, House Democratic Leader Nancy Pelosi (Calif) charged that the "President decided to go a partisan route" on CAFTA. If the Republicans win, she said, it will be a Pyrrhic victory because Democrats will be able to take the message to the American people that they are the ones that are looking out for Central American workers.

After the closed door meeting with President Bush, House Republican Leader Tom Delay said it was the Democrats that had turned CAFTA into a political issue because they saw a possible window of opportunity to derail the President's trade agenda. He charged that the Democratic leadership had "brow beaten" their free-trade members into voting against their own principles.

Textiles

The White House won over some textile-district Republicans in the last few days by securing an agreement from the CAFTA countries to close some loopholes that US textile producers said would have allowed the use of fabric and components from China. The six CAFTA countries agreed to change the trade pact's rules of origin to require that pockets and linings can only come from a CAFTA country.

Opponents charged that the Administration did not have a firm commitment from the Central American countries to agree to the change. But a letter signed individually by the trade or economic ministers of each of the countries specifically states "my government would be able to accept your proposed modification in those consultations." The change would have to be formally negotiated after CAFTA is implemented, according to a US trade official, who added that the United States is expecting that the Central American countries will use the negotiations to seek some changes of their own.