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June 19, 2005

Dan Tarullo and Dan Restrepo on CAFTA

I believe their views are trustworthy:

Dominican Republic-Central America Free Trade Agreement-Center for American Progress:
To: Interested Parties
From: Daniel Tarullo, Professor of Law, Georgetown University and Dan Restrepo, Director of Congressional Affairs, CAP

[T]the Administration is now trying to deflect attention from the economic shortcomings of DR-CAFTA by arguing that its rejection would be a foreign policy setback for the United States.... [H]aving ignored the needs of U.S. workers and failing to engage in bipartisan consultation on trade policies for four years, the Administration has no one but itself to blame.... Opposition to DR-CAFTA need not, and should not, signal opposition to trade agreements generally. Both the foreign policy and economic interests of the United States are well served by trade liberalization....

[L]ike most recent trade agreements, DR-CAFTA affects much more than "trade" - it reaches far beyond import policies into domestic economic and social policy, by imposing, for example, obligations to provide certain forms of intellectual property protection.... Judged against the standards of a smart trade policy, DR-CAFTA is badly flawed....

The other six countries in DR-CAFTA will see some benefits in this agreement, likely in the form of an improved investment climate.... [T]he rule of origin in the textile provisions is sufficiently restrictive that it may impede the ability of industries in the DR-CAFTA countries to remain competitive.... The refusal of the Administration to include enforceable labor standards in the agreement, despite the well-documented absence of basic international labor protections in some of the DR-CAFTA countries, is a missed opportunity.... Respecting the environment and securing progress on development are essential to rebuilding public confidence and congressional support for trade agreements. Regrettably, the Administration is not dedicating the long-term resource and financial commitments necessary to realize the environmental goals of the agreement. The Administration's insistence on a provision that forbids DR-CAFTA countries from using test data submitted by one pharmaceutical company to approve a similar drug of another pharmaceutical company could increase the cost of much-needed drugs in the region....

[T]rade policy does not exist in isolation from other economic policies.... The sluggish job and wage growth of the last four years have created an unfavorable situation for displaced workers.... Existing safety net programs such as extended unemployment insurance and trade adjustment assistance (TAA) already fall far short of needed support. Yet... the Administration has tightened the eligibility requirements....

Most presidents since the end of World War II have tried to pursue a bipartisan trade policy. The current Administration has broken radically with this tradition.... On DR-CAFTA, as with each previous trade agreement, the Administration has failed to engage in bipartisan consultation.... Members of Congress who want to support trade expansion through smart policies have grown increasingly frustrated.... [T]his trade agreement, and the policies surrounding it, fall so far short of a much-needed smart trade policy.

Posted by DeLong at June 19, 2005 10:05 PM