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Trip aims to lift free trade

U.S. execs tour Central America

October 18, 2005

BY MARK DRAJEM
BLOOMBERG

U.S. Commerce Secretary Carlos Gutierrez is ushering executives from Ford Motor Co., Hewlett-Packard Co. and 17 other companies around Central America this week in an effort to make good on promises to expand trade with the region.

The trip comes two months after the United States ratified the Central American Free Trade Agreement. The measure passed only after President George W. Bush promised reluctant lawmakers and manufacturers that it would create U.S. investment opportunities in Central America, increase U.S. exports and foster political stability in a region once wracked by civil war.

Gutierrez said the mission is aimed at turning those pledges into reality.

"We did say that CAFTA is going to do all these things, so now let's go out and deliver," Gutierrez said in an interview soon before he left Washington on Monday. "From the standpoint of executing CAFTA, we're really only 10% of the way there."

CAFTA is to take effect Jan. 1, ending most tariffs on more than $33 billion in goods traded among the United States and the other Cafta signatories: Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua.

The pact was approved by just two votes in the U.S. House of Representatives and a more comfortable nine-vote margin in the Senate.

The accord became a flash point for lawmakers who argued that further lowering U.S. barriers to cheap foreign goods would undercut U.S. wages and labor standards. CAFTA passed Congress only after large U.S. businesses lobbied lawmakers, the Bush administration promised to scale back provisions that hurt textile makers and congressional leaders urged apprehensive colleagues to abandon their opposition out of loyalty to Bush.

"If you are going to sustain support for free trade over the long term, you need to show that these deals actually work," said Stephen Biegun, vice president for international government affairs at Dearborn-based Ford and a participant in the trip. Ford wants to sell more U.S.-made cars in the region, he said.