Free trade agreement to Maine’s advantage

Rather than “send jobs overseas” or “drive small farmers off the land,” Congress will soon have the opportunity to take action to approve the pending Dominican Republic-Central America Free Trade Agreement (DR-CAFTA) that will give Maine farmers, businesses and manufacturers tariff-free access to growing markets in those Central American nations, critical to Maine’s economic success.

The proposed DR-CAFTA agreement eliminates import tariffs against U.S. goods and produce in Costa Rica, El Salvador, the Dominican Republic, Guatemala, Honduras and Nicaragua. These six nations have enjoyed free-tariff access to U.S. markets for 20 years under the Caribbean Basin Initiative.

DR-CAFTA would immediately remove 80 percent of export tariffs on Maine-manufactured goods, like electronics, computers, machinery and paper goods. Within 10 years, all tariffs on these good would be eliminated. For agricultural products, such as potatoes and dairy, DR-CAFTA would remove 50 percent of tariffs right away, and all duties within 15 years.

For Maine, that means increased access to the United States’ 12th- largest export market, a growing market already larger than Australia, Chile and Singapore combined. In 2003, Maine exports to DR-CAFTA countries totaled $32 million. When we stop and consider that Maine’s exports to the DR-CAFTA market have increased by more than $20 million in the past five years, we can see the potential growth and diversification of Maine’s economy if the pending free trade agreement is approved.

This is what it will do for Maine, not “let me tell you what it will not do.”

Labor and Environment

CAFTA will not “undermine international labor and environmental standards.”

The DR-CAFTA agreement requires countries to enforce their own labor laws. In the case of DR-CAFTA countries, the International Labor Organization found their laws to be consistent with the International Labor Organization core labor standards. It is worth noting that DR-CAFTA countries have passed more ILO Labor Conventions than the United States.

The DR-CAFTA agreement also involves the United States and international organizations in labor enforcement. The International Labor Organization and the Inter-American Development Bank are participating with the six governments to ensure enforcement and enhancement of existing laws and regulations, and the U.S. Congress has appropriated $20 million for enforcement training and capacity building.

The environmental provisions in the DR-CAFTA agreement go far beyond previous trade agreements by ensuring the enforcement of environmental laws through an innovative public submission process and establishing a procedure for fines and sanctions of countries that fail to enforce their laws.

The language in the DR-CAFTA agreement also goes beyond previous trade agreements in creating innovative capacity building, cooperation and information-sharing frameworks, including the establishment of an Environmental Cooperation Commission, designed to strengthen the ability of the parties to improve environmental conditions.

Investor-State Disputes

The DR-CAFTA proposal contains investor-state provisions that are more open and transparent and go far beyond what was included in NAFTA. Under the provisions of this agreement, hearings and documents are now public and “friends of the court” submissions are expressly authorized.

DR-CAFTA has provisions to ensure that investors and companies cannot abuse the process. It allows tribunals to dismiss frivolous claims at an early stage of the proceedings. The tribunals are fully accountable – governments may review draft tribunal opinions and issue interpretations of the rule that are binding on tribunals.

In the final analysis, the DR-CAFTA proposal goes farther than many former trade agreements in terms of its consideration of and adherence to international labor and environmental standards, and the resolution of investor-state disputes. At the same time, it offers Maine workers great potential economic growth in future years. For all of these reasons, Congress should approve it.

Christopher J. Hall is the executive vice president and general counsel of the Maine State Chamber of Commerce.