April 19, 2024
Business

Maine trade group forecasts new markets with CAFTA

WASHINGTON – Overcoming a last-minute snag on textiles, the United States and four Central American countries reached a free trade agreement on Wednesday that a Maine trade group says will open new markets for the state.

Negotiators reached agreement in all areas, including textiles and agriculture, U.S. Trade Representative Robert Zoellick announced at a news conference with the trade ministers of Guatemala, El Salvador, Nicaragua and Honduras.

“Negotiations began last January, and today we have fulfilled that vision with a cutting-edge, modern free-trade agreement to tear down the tariff walls that block trade between the United States and Central America, between friends and neighbors,” Zoellick said.

A fifth nation, Costa Rica, abruptly left the talks on Tuesday complaining about excessive demands being made by the United States for the nation to open up its market to foreign competition in telecommunications and insurance.

However, U.S. officials expressed hope that the differences with Costa Rica can be resolved in coming weeks so that it will be included when the administration submits the Central American Free Trade Agreement, or CAFTA, to Congress early next year.

The breakthrough in textiles came after an all-night bargaining session. Some of the Central American trade ministers had expressed pessimism that an agreement could be reached during this negotiating round and predicted that the talks would have to recess and start again in January.

The agreement opens up new markets for Maine-based businesses, according to Richard Coyle, director of the Maine International Trade Center.

“Any of the free trade agreements are going to provide opportunities for Maine businesses,” Coyle said Wednesday.

He said that in anticipation of the agreement, MITC gathered key trade statistics about Caribbean and Central American countries and their trade requirements for businesses to use. The center also has scheduled an educational program on trading with businesses in those countries for April in Portland.

The free trade deal covering Central America has stirred strong opposition among U.S. sugar cane and sugar beet farmers, who fear competition from lower-priced Central American sugar, and from the U.S. textile industry, which is concerned that the deal will open the beleaguered industry to even more foreign competition.

The deal, which will phase out virtually all trade barriers among the participating countries over the next decade, represents the sixth free trade deal the United States has achieved.

The North American Free Trade Agreement covers Canada and Mexico and the United States has individual free trade agreements with Israel, Jordan, Chile and Singapore.

The success in reaching the Central American deal gave the Bush administration a badly needed win after a series of setbacks in trade.


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