Inside US Trade
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OPPONENTS, SUPPORTERS SEE TEXTILE REPUBLICANS SUPPORTING DR-CAFTA


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Date: July 15, 2005





Opponents and supporters of the Dominican Republic-Central American Free Trade Agreement this week said that several House Republicans with textile constituencies who are presently undecided or leaning against the deal will ultimately support it. But these sources said few members are likely to shift their positions until an actual House vote, which is now expected to take place the last week of July, just before Congress recesses for the month of August.





“We believe there are at least five textile votes out there, but they aren’t going to come out until the vote,� one DR-CAFTA supporter said. This will shield them from expected criticism in their districts, sources said.





According to informed sources, the Bush Administration is actively negotiating with five House Republicans, including Rep. Bob Inglis (R-SC) to get their votes. These members are demanding that ministers of Central American countries sign a letter stating they will agree to a rules of origin change in the DR-CAFTA that will ensure continued U.S. sales of pocketing and lining to Central America, they said.





An undated letter from Inglis’s office to Ways and Means Committee Chairman Bill Thomas (R-CA) obtained by Inside U.S. Trade states that U.S. Trade Representative Rob Portman has already secured such a letter signed by the six DR-CAFTA ambassadors, but makes it clear this should be signed by finance ministers from those countries. More importantly, it said the textile sections of trade promotion authority would seem to required that legislation be approved by the House and Senate for the U.S. to agree that non-visible pocketing and lining would have to be sourced from the U.S. or the DR-CAFTA region -- and not from a third country -- in order to be included in a garment entering the U.S. duty-free. A textile industry source said it would be very difficult to get Senate Democrats to vote for this change since it would mostly help House Republicans from textile districts.





The letter also refers to two other issues Inglis has been discussing with the administration. The first is a tariff preference level that allows Nicaragua to incorporate a certain amount of third-country fabric into garments that would receive duty-free entry to the U.S. In exchange for Nicaragua purchasing an amount of U.S. fabric equal to the third-country fabric benefiting from the TPL, the letter said the U.S. agreed to allow the TPL to continue for a full 10 years instead of phasing it out over six-to ten years. It also said the U.S. offered to allow the unused portion of the TPL to carry over to year 11 of the FTA.





The letter then asks if these changes would require legislation since they are modifications to CAFTA.





Finally, the Inglis letter says the administration is revising its commitment on cumulation, which allows Mexican fabric to be included in garments that would receive duty-free access to the U.S. Specifically, it says that USTR would not implement cumulation with Mexico until their customs procedures are improved, and that cumulation will not extend to other countries. “Presumably, no legislation is needed to address these points,� the Inglis letter said.





The letter does not explicitly state that Inglis would only support DR-CAFTA if legislation is approved changing DR-CAFTA so that pocketing and lining would have to be sourced from the U.S. or the region. But it does thank Thomas for speaking to several members prior to the July 4th break, and states that a strategy is needed for “evidencing the commitments of the United States on these matters.�





Thomas at a July 14 press conference said he would have some discussions on these issues with Inglis and other members and would be preparing a written response. He said the pocketing issue would likely require the legislation, the Nicaragua TPL might require legislation, and that other demands might be addressed through administrative action or negotiations.





A DR-CAFTA opponent said it also will be difficult for House Republicans with textile constituents to vote against the bill in the face of tremendous pressure from the White House and GOP leaders, which will only increase once the actual floor vote begins.





He said these members face administration officials who insist a vote against DR-CAFTA will make the president a lame duck while he is engaged in a war on terrorism. “I think all the textile Republicans are in play,� he said.





The White House is increasing pressure on House textile Republicans with a presidential visit planned for North Carolina today (July 15). President Bush will fly to Gastonia, N.C., on the outskirts of Charlotte, tour the Stowe Mills textile mill in Belmont, N.C., and deliver a speech on DR-CAFTA at Gaston College in Dallas, N.C., according to a spokesman for Rep. Sue Myrick (R-NC). Myrick is the only House Republican from North Carolina who so far is publicly supporting DR-CAFTA, and the presidential visit is entirely in her district.





DR-CAFTA supporters argue they are picking up support among House textile Republicans in Georgia, and that they have picked up at least one more vote in South Carolina.





In Georgia, Rep. Lynn Westmoreland (R-GA), who was previously undecided, will vote in favor of DR-CAFTA, a spokesman said. A DR-CAFTA opponent said Westmoreland has few textile workers in his district, and that opponents at best had him rated as a “3� on a 1 to 5 scale, with 1 representing firm opponents of DR-CAFTA.





Several other members from Georgia remain undecided, but supporters are targeting Republican Reps. Jack Kingston, Tim Price, Nathan Deal and Phil Gingrey. A DR-CAFTA opponent predicted Deal, Prince and Kingston would vote for DR-CAFTA and said supporters have “a good chance� of attracting Gingrey.





Rep. John Linder (R-GA) has already come out in support of DR-CAFTA.





Rep. Charlie Norwood (R-GA) also remains on a list of House textile Republicans targeted by DR-CAFTA supporters, according to DR-CAFTA supporters, but opponents scoffed at suggestions he might vote for DR-CAFTA. His office said this week he is firmly opposed to the deal and issued a statement blasting the agreement’s dispute settlement provisions, and hinting that DR-CAFTA could undermine U.S. immigration policies with its services commitments allowing movement of natural persons.





In South Carolina, Inglis, J. Gresham Barrett and Henry Brown remain undecided, with all three seen as possible pick-ups by DR-CAFTA supporters. An opponent suggested Brown’s vote could be in play as Brown has sometimes argued the DR-CAFTA could benefit the port of Charleston. But the opponent predicted it would be difficult for supporters to secure Barrett’s support.





The DR-CAFTA opponent said support for the deal from the two North Carolina senators Elizabeth Dole and Richard Burr does not seem to have moved any House members in that state to support DR-CAFTA. The chair of the House Textile Caucus, Rep. Howard Coble (R-NC), is still “leaning no� on the deal, according to his office. In addition, Reps. Virginia Foxx (R-NC) and Patrick McHenry (R-NC) are firm nos, according to their offices.





Supporters still believe they have a shot at winning the support of Foxx and McHenry, one informed source said. But he indicated that the two were not high on the list of members that supporters think they will ultimately win over. Supporters also still hope to win over Coble, who voted in favor of the North American Free Trade Agreement, and Rep. Robin Hayes (R-NC), who provided a key vote when fast-track was approved by the House in 2001. However, a spokesman for Hayes described him as a “solid no� on DR-CAFTA.





Supporters also hope to pick up some votes from Republican members in Alabama with textile constituencies, including Reps. Terry Everett and Michael Rogers. One supporter noted that Rogers as deputy whip is a member of House leadership, and as a result might ultimately support DR-CAFTA.