From Tom Ricker, Quixote Center:
If you do not want to read all this, A summary of swings – Snowe made opposition official, Wyden made his support official. Bingaman and Jeffords gave clear indications of leaning strongly against agreement (both voted No on reporting out the bill) but this is hardly definitive, and Lincoln voted in favor of reporting out the bill – but made no statement. Thomas voted yes to report out bill – but is still upset over sugar. First vote 11-9 in favor of reporting out draft implementing legislation (see below for explanation, andfull list of votes). House Ways and Means is scheduled to hold up markup tomorrow at 10:30.
Committee opened with Grassley welcoming folks to the ‘mock’ mark up process, emphasizing that the hearing would make recommendations to the administration and not binding amendments. He also indicated that he felt most of the amendments being offered were not appropriate, as they were not related to implementing the agreement, but generally sought to create new programs or side agreements.
Grassley’s comments on the agreement itself (as opposed to the process) focused on the need to stand by allies in the region. He read extensively from Jimmy Carter’s letter in favor of the agreement. At one point he said that the idea for CAFTA came from Central America, not the U.S. (probably not worth arguing, but certainly not the way I remember it), and that it would be a bad signal to turn our backs on them.
Other opening comments:
Grassley was followed by Bunning, (Republican from Kentucky), who said he would vote for the agreement. He was upset that tariffs on U.S. ag products would take ten-fifteen years to go to zero, and that Central America had all these advantages, but he could live with it, especially since CAFTA protects Kentucky’s bourbon industry (bourbon is a product only made in Kentucky! – one of the first items covered in the market access chapter BTW.) Bunning did say he was annoyed with Bush for not getting personally involved in the fight.
Conrad (Democrat, ND) opposes CAFTA. Says its “time to slow down” with our current trade agenda, because it is not working. Deficit up to $618 billion. Not sustainable, etc…Primary concern was of course sugar. We should not put this industry up on the chopping block, especially since we are getting little in return. Made interesting point that U.S. exporters already control 94% of the market for wheat and barley in Central America so no where to go really. Not sure if number is accurate, but interesting point.
Baucus followed (Democrat, Ranking member, MT) started with emphasizing Congresses constitutional responsibility to regulate international commerce, and his annoyance that the Bush administration did not consult or take the many concerns expressed to them seriously. Primary concern was also sugar. Will opposed unless something is worked out. Hoping that committee would send a strong message to the administration with actions today because there were many issues down the road and [senate finance] should not be marginal to that process.
Bingaman (Democrat, NM) followed. He was the ONLY Democrat to express concerns related to impact in Central America (others danced around it in reference to labor rights, though clear their concern was impact on U.S. workers.) He said that he was worried about the potential impact that trade liberalization would have on Central American agriculture. (I should note that this was thinly veiled concern about where Central Americans displaced by trade would go – e.g. New Mexico). He also expressed concerns about the weakness of the workers rights chapter.
Lott (Republican, MI) Supported the agreement – like Grassley, because we have to take care of our friends in our neighborhood. Indicated that his long standing support for the sugar program would be on the line and that if sugar kept up its opposition over a such a small amount it could create a major rift within the agricultural community – “If we let sugar take this down we are in trouble.”
Thomas (Republican, WY) – Prepared to oppose the agreement unless the administration listens to the concerns of sugar growers. The Administration should have listened to these concerns during negotiations. They have no one to blame but themselves for the impasse. Indicated that the sugar industry folks would be having a meeting at the White House this week to discuss a fix.
Kerry (Democrat, MA) – Kerry said that there were a larger set of issues at stake with CAFTA than sugar or labor – loss of manufacturing jobs, increasing inequality, struggle over the future of benefits. We needed to stand by U.S. workers. Emphasized that CAFTA did more to protect corporate interests than the rights of workers. CAFTA put labor concerns in the bottom tier of dispute mechanisms. He offered an amendment to attempt to fix this (more below).
Wyden (Democrat, OR) – Said he would support CAFTA because it created new export opportunities. He read from a letter from the president of Honduras which emphasized opportunities for U.S. companies in Telecommunications, sale of energy related services, and hospital equipment (among other things.) He said he has similar letters from other Presidents in Central America.
Kyl (Republican AZ) – Like the republican before him, Kyl emphasized the need to stand with our neighbors and friends in Central America. Saca and Flores (former and current presidents of El Salvador) are stand up guys who want to see this agreement passed, as did all of the business associations and leaders in Central America. CAFTA would have a marginal impact in the U.S. but was critically important for Central America. He also talked a bit about the deficit being an “investment” deficit – people like to put their money here because it is such a great place to do business – not a trade deficit. [This is an interesting argument – the taking over of domestic businesses and concurrent profit repatriation (leading to current account deficits) in the U.S. is a sign of strength for the U.S. economy].
Snowe (Republican, ME) – Announced that she would oppose the agreement. The U.S. has not done a good job enforcing provisions of current agreements. CAFTA will simply make things worse. Mentioned China using CAFTA countries for transshipment of textiles. ME has lost 20,000 manufacturing jobs since 2000. Can not afford to loose more.
The rest of hearing dealt with two amendments (following an “explanation” of the implementing legislation by USTR).
The first amendment was one by Wyden that would extend trade adjustment assistance to service workers. Snowe and Rockefeller (D-WV) stated their support and asked to be listed as co-sponsors. Grassley admitted that Wyden probably had the votes to get it through, but encouraged him to withdraw it, because “this is not the right forum to create a new program.” Wyden agreed to withdraw but wanted some assurance from Grassley that Finance would move on such a program immediately so it could be up and running by the time CAFTA went in to effect. There was some back and forth as various members encouraged Wyden not to withdraw the amendment. In the end, Wyden did not withdraw the amendment, but suggested a voice vote in order to “send a message to the administration.” It was not clear to me whether the voice vote was actually binding, but for what it was worth, no one said “No.”
Next Kerry introduced his amendment, with Schumer, that would strengthen the dispute mechanism for labor rights issues by “subjecting all of CAFTA’s labor provisions to binding dispute settlement.” Kerry pitched this as an attempt to get back on the track laid by the Jordan free trade agreement (which gave labor and environmental issues access to core dispute mechanisms). The debate made clear that no one on the committee, except perhaps Kerry, really understood what was in the labor chapter. The USTR folks there to consult largely evaded the issue. They said that such an amendment would require them to renegotiate the agreement and that the administration was not willing to do that.
The amendment was defeated in a tie vote 10-10:
Yes – Baucus, Kerry, Schumer, Rockefeller, Wyden, Snowe, Lincoln, Bingaman, Conrad. Jeffords (by proxy).
No – Grassley, Lott, Bunning, Thomas,, Kyl (by proxy), Hatch (by proxy), Santorum (by proxy), Crapo, Smith (by proxy), Frist (by proxy).
The much anticipated showdown over sugar amendments (Conrad had introduced 8, Grassley countered with 5 prior to hearing) did not materialize. There were no amendments offered on sugar during the mark up. Conrad decided to hold off because of upcoming negotiations with the White House.
Vote to report out to Committee:
Grassley then moved to have the committee vote to report out the draft implementing legislation – basically an informal approval of draft text. The vote was 11 yes to 9 no:
Yes: Hatch (by proxy), Lott, Kyl, Thomas, Santorum (by proxy), Frist (by proxy) Smith (by proxy), Bunning, Grassley, Lincoln (D-AR), and Wyden.
No: Snowe, Crapo (R-ID) (by proxy), Baucus, Rockefeller, Conrad, Jeffords (by proxy), Bingaman, Kerry, Schumer.
There was a dispute over whether proxy votes should count. From Congress Daily:
“Craig Thomas, R-Wyo., signaled today he is ready to cast the deciding vote in the Senate Finance Committee to support the draft Central America Free Trade Agreement, despite his misgivings about the impact of its provisions on U.S. sugar growers. While the committee voted 11-9 in favor of the draft in a non-binding “mock markup,” Democratic objections caused Senate Finance Chairman Grassley to withdraw the vote with a promise to formalize it off the Senate floor later today. Sen. Kent Conrad, D-N.D., objected to the vote on grounds that panel rules require that proxy votes cannot be used to report out a bill. Grassley said afterward that he did not expect any more amendments would be in order, and that he expected the vote would be completed the next time the full Senate votes. In the initial vote that was withdrawn, two Republicans voted against CAFTA — Sens. Olympia Snowe of Maine and Mike Crapo of Idaho — and two Democrats, Sens. Blanche Lincoln of Arkansas and Ron Wyden of Oregon, voted for it. ”
Bingaman voted “No” but asked several times if he would have another chance to vote before it was reported out of committee to the floor of the Senate (he will). So his “No” is not in stone by a long shot.
IF Wyden and Lincoln (both Dems) had voted “No” it would have been 11 to 9 against, and maybe 12 to 8 (Thomas probably would have flipped if he was not the deciding vote).