Washington: US exports to four Central American countries grew more than 18% in 2006 after the George W. Bush administration began a free-trade agreement with them. Imports were unchanged as textile trade lagged.
The growth in trade, led by exports of food, petroleum products and machinery, was heralded on 28 February by President George W. Bush and Salvadoran President Elias Antonio Saca after a White House meeting just two days before the first anniversary of the trade deal.
“A lot of people are benefiting” from the US-Central American Free Trade Agreement (Cafta), Bush said. El Salvador’s government is a key ally of the US in the region, and the first country to implement Cafta.
Cafta removes duties on 80% of the $15 billion (Rs66,410 crore) in annual US exports to the region and makes permanent the duty-free access to the US 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 US will carry out the agreement with the Dominican Republic soon, US Trade Representative Susan Schwab said . Former Costa Rican presidential candidate Otton Solis led an estimated 24,000 people opposed to the trade deal in a march through the capital of San Jose , Nacion reported.
Saca said Salvadoran exports are up 20% in 2006 from the previous year and “there’s no doubt free trade has allowed this to become true”.
Overall, US exports to the four nations rose 18% to $10.2 billion in 2006, while imports were unchanged at $10 billion, according to US Census data. Total annual trade with the region is less than that traded with China in just three weeks.
The agreement has not fulfilled the promises of linking American textile makers with apparel sewing operations in the four countries to fend off competition from China, both supporters and critics say.
Imports of clothing from the four countries were down more than 7% in 2006 compared with a year earlier. Apparel imports from China, meanwhile, surged more than 22%.
“Imports from Asia are displacing those from Cafta,” said Lloyd Wood, a spokesman for the American Manufacturing Trade Action Committee, which represents domestic textile producers opposed to the deal. “Until you address the subsidies in China, Cafta countries will continue to lose market share.”
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 US Association of Importers of Textiles and Apparel. “It’s not simple, and some of the provisions are still not available.”
Saca praised Bush for scheduling a trip to Latin America in March , saying, “It’s going to give a signal that the US is interested in Latin America.”
Bush is scheduled to travel to five Latin American countries — Brazil, Uruguay, Colombia, Guatemala and Mexico.