[Ip-health] Central American exports to US not increasing with CAFTA (Bloomberg)

[Mike Palmedo]

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[ Picked text/plain from multipart/alternative ]
http://www.bilaterals.org/article.php3?id_article=7286

Leaders praise CAFTA as U.S. exports climb - Salvadoran leader and Bush hail
trade growth, though textiles lag

By ROGER RUNNINGEN and MARK DRAJEM
Bloomberg News
February 27, 2007

U.S. exports to four Central American countries grew more than 18 percent
last year after the Bush administration began a free-trade agreement with
those nations. Imports were unchanged as textile trade lagged.

President Bush and Salvadoran President Elias Antonio Saca heralded on
Tuesday the growth in trade, led by exports of food, petroleum products and
machinery, after a White House meeting just two days before the first
anniversary of the trade deal.

"A lot of people are benefiting" from the U.S.-Central American Free Trade
Agreement, Bush said. El Salvador's government is a key ally of the U.S. in
the region, and the first country to implement CAFTA.

CAFTA removes duties on 80 percent of the $15 billion in annual U.S. exports
to the region and makes permanent the duty-free access to the U.S. that most
products from Central America already have. All of the nations except Costa
Rica have ratified the accord, and the agreement has gone into effect with
four of the six nations, Honduras, El Salvador, Nicaragua and Guatemala. The
U.S. will carry out the agreement with the Dominican Republic soon, U.S.
Trade Representative Susan Schwab said this week.

Saca said Salvadoran exports are up 20 percent in 2006 from the previous
year, and "there's no doubt free trade has allowed this to become true."

U.S. exports to the four nations rose 18 percent to $10.2 billion last year,
while imports were unchanged at $10 billion, according to U.S. Census data.
Total annual trade with the region is less than that traded with China in
just three weeks.

The agreement hasn't fulfilled the promises of linking American textile
makers with apparel sewing operations in the four countries to fend off
competition from China, supporters and critics say.

Imports of clothing from the four countries were down more than 7 percent in
2006 compared with a year earlier. Apparel imports from China, meanwhile,
surged more than 22 percent.

"Until you address the subsidies in China, CAFTA countries will continue to
lose market share," said Lloyd Wood, a spokesman for the American
Manufacturing Trade Action Committee.

Even supporters of the trade agreement say the rules necessary for duty-free
imports in the pact make it difficult to use and not worth the effort.

"Technical problems with the implementation is a large part of what is
dragging them down," said Julia Hughes, vice president of the New York-based
United States Association of Importers of Textiles and Apparel. "It's not
simple, and some of the provisions are still not available."