Rep. Hayes' unprincipled vote

Rep. Robin Hayes (R-NC) cast the decisive vote for CAFTA and earned unforgettable notoriety as a practical politician. He first voted against CAFTA, but then switched his recorded vote to yes, after receiving assurances of initiatives for job creation in his District 8. The other districts have enough jobs already.
The House deserves reproach for allowing voting beyond the allocated time and switching of recorded votes, tantamount to voting twice. Outside the House, those practices would be unacceptable and perhaps illegal. Imagine if Carteret County residents could vote again for Superintendent of Education. It would resolve a dilemma, but wouldn't be fair or legal.
There is no legal recourse, however, because the Congress would not allow the courts to entertain a vote-manipulation suit. Legislative values are violated, nonetheless, when a well-discussed trade agreement necessitated irregular promises to one voter, to the detriment of others who voted on time and did not switch their votes. Holding a vote-buying bazaar and changing your mind are perfectly acceptable before the vote, but not during it. The representatives from the lesser 12 North Carolina districts should challenge, inside the House, the CAFTA undemocratic vote.
Hayes is a descendant of the family that built textile giant Cannon Mills and a North Carolina representative. He failed on principle on both counts.

Vote-buying bazaar reports profit

In the July 27th Cafta's Benefits editorial, the Wall Street Journal lamented the shame that "the Bush Administration has had to hold a vote-buying bazaar" to pass CAFTA. However, it appears from Gregg Hitt's piece ("Last-Minute Deals Put Cafta Over the Top," WSJ, July 29, 2005, p. A-4) that the bazaar continued after the polls had closed. CAFTA passed 217-215 after one representative, Mr. Robin Hayes, changed his vote late at night long after the 15 minutes allocated to the vote.
The House of Representatives deserves a reprimand for allowing voting beyond the allocated time. This House deserves reproach to incite and to allow switching of recorded votes. Outside the House, those practices would be unacceptable and perhaps illegal. Imagine allowing Broward Co., Florida, residents to vote the day after the first Tuesday in November or to change the vote after voters in the rest of the country had cast their ballots. The procedural maneuvers used to pass the bill certainly have the appearance of impropriety; in retrospect they appear as artful dodge. A principled House would repudiate the CAFTA vote.
CAFTA will be a disaster for the sugar economies of Central America and the Dominican Republic. Having subsidized high-fructose corn syrup replace cane sugar, in which they have a clear comparative advantage, will have consequences that will haunt the U.S. for years. CAFTA will be known as free trade more in the mockery than in the observance.

Trade Commission Misses the Syrup

The U.S. International Trade Commission managed to ignore high-fructose corn syrup in a study of the impact of DR-CAFTA. The reason may be that increased exports of HFCS is the windfall for the U.S. However, the improved prospects for HFCS come at a very high price to the cane sugar industry of Central America and the Dominican Republic. Sugar exports to the U.S. will always be subject to quota while imports of HFCS will be free of quota and duty. It is well known that corn syrup can substitute for sugar in many food applications, including juices, bread, and yogurt.
The U.S. ITC is known for high quality studies. The absence of consideration of corn syrup suggests embarrassment of riches at the extraordinary benefits to corn and, perhaps, outside influence. The corn industry lobby does not want to draw attention to the very bright prospects for corn syrup in CAFTA. The sugar industry lobby wants to expose the impact of new sugar quotas but is not concerned with benefits to other industries. It is only ironic then that in a recent article Robert B. Zoellick wrote “CAFTA will promote equality of opportunity in economies long dominated by economic elites and powerful families,” Washington Post, May 24, 2004, A17. The elite U.S. corn and sugar families appear to be quite powerful indeed. (Zoellick is deputy secretary of state and the former U.S. trade representative who negotiated CAFTA.)
The ITC study is “U.S.-Central America-Dominican Republic Free Trade Agreement: Potential Economywide and Selected Sectoral Effects,” Investigation No. TA-2104-13; Publication 3717, August 26, 2004. The purpose of this investigation was to assess the likely impact of the U.S.-Central America-Dominican Republic Free Trade Agreement on the U.S. economy as a whole and on specific industry sectors and the interests of U.S. consumers. This purpose was not accomplished for the sweeteners sector.

Misleading CAFTA Sugar Quota

In DR-CAFTA, the United States would grant the Dominican Republic an unusable sugar quota. In order to use the quota, the D.R. would need to demonstrate that it has a sugar trade surplus excluding exports to the United States. Because the D.R. only exports to the U.S., use of the quota would necessitate incurring a loss in sales to the world market.
This unusable CAFTA quota is just another nail in the Dominican sugar industry’s coffin. The “free trade” agreement would also deal a blow by establishing that sugar exports to the U.S. will always be subject to quota while imports of a sugar substitute, high-fructose corn syrup, will be free of duty and of quantitative restrictions.
These provisions pour salt on the trade wound inflicted by the reintroduction of the U.S. quota in 1983. That primary quota, now formalized in the World Trade Organization, imposes a cost on U.S. consumers of about $1.9 billion a year and robs competitive sugar producers of about a billion dollars a year in lost export trade opportunities. The United States should not treat poor, friendly countries like that, especially in areas where they are competitive.
The Dominican Republic holds the largest share of the sugar WTO quota after earning it fair and square by being the most competitive supplier in the years of free sugar trade. In regards to sugar, CAFTA would become an un-American endeavor. The sugar “quota” misleading provision is found in the DR-CAFTA texts, under Annex 3.3, U.S. Appendix I, Tariff Rates Quotas, Sugar, 3 (d), page 9.

Sugar and Free Zones Counterpoint

In essence, the U.S. wants the Dominican Republic to pay twice for Caribbean Basin Initiative benefits: once with decimated sugar exports and twice with a dismal sugar-corn syrup exchange. In this regard alone, DR-CAFTA is conduct unbecoming U.S. free trade rhetoric and a threat to the wellbeing of thousands of Dominican sugar workers.

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DR-CAFTA would create new sugar quotas that would grow at 2 percent per annum in perpetuity. Sugar imports are already subject to quotas introduced in 1983, the very same year the U.S. created the Caribbean Basin Initiative, which grants preferential treatment to imports from Caribbean countries, including the DR-CAFTA signatories. These two measures have been a net loss to the Dominican Republic. The combined value added in cane farming, sugar manufacturing and free trade zones was 5.1 percent of the economy in 1983 but 3.6 percent in 2003.
During the sugar free trade period, the Dominican Republic was the most competitive supplier of sugar to the U.S. market. In spite the high prices before 1983, the U.S. was importing above four million tons of sugar, and about one sixth was provided by the Dominican Republic alone. The U.S. sugar quotas, conveniently sanctified by the Uruguay Round, are over one million tons of raw sugar and a token quota of refined sugar. Over the past two decades the Dominican Republic has failed to realize some $2 billion in potential sales to the United States due to the shrinkage in its U.S. sugar quota, according to a statement submitted to the U.S. Congress on April 26th (Johnson, Robert, "Statement...", Balch & Bingham LLP, p. 7).

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The CBI allowed the rapid development of free trade zones that house manufacturing firms, which export all production, use duty-free imported inputs, and are exempt from all other taxes. Clothing and textiles account for about 70 percent of the 189,000 free-zone jobs (see Table 30 in 2004 Stat. Report, pdf). While most free zones employees earn minimum wages, the zones job creation carries a cost to the rest of society since zone firms pay no taxes. DR-CAFTA has been promoted as necessary to save those jobs, especially after the end of textile quotas, competition from China, and the upcoming requirement to pay taxes. To comply with the subsidy rules of the World Trade Organization, free zones firms will need to pay taxes after 2007.
The Dominican Republic has been the largest exporter to the U.S. under the CBI, proving to be a very competitive supplier vis-à-vis other CBI countries. The same competitiveness in sugar cannot be expressed with sugar under quota. Ironically, the U.S. wants DR-CAFTA to “level the playing field,” by making more U.S. goods duty-free in the affected countries but not allowing duty-free trade in sugar.

A Spoonful of Sugar, a Cup of Corn Syrup

Sugar has become the conundrum of the DR-CAFTA agreement signed between the U.S., five Central American countries and the Dominican Republic. Some criticize the U.S. sugar industry for opposing the agreement, which would increase U.S. sugar imports by a mere 1.2 percent -- about a spoon and a half a week for each American consumer. This token of free trade would be accomplished through the creation of small new sugar quotas. But the agreement would also allow U.S. producers to export high-fructose corn syrup, free of duty or quota, at a rate of a cup a week for each consumer in the lesser countries. The agreement would be the predator of the Dominican sugar industry.

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Under DR-CAFTA, Dominican refined sugar production of 60,000 tons a year would be largely replaced with imports of high-fructose syrup, made from subsidized U.S. corn. Dominican exports would remain subject to quota and restricted to raw sugar. The small CAFTA 10,000 ton a year raw sugar quota given by the U.S. can not be realized unless the Dominican Republic first exports similar quantities to the world market, at a loss. In the end, CAFTA, a free trade agreement, would reduce market opportunities for the product in which the Dominican Republic has the highest comparative advantage. This very unequal exchange is not free trade but rather anti-competitive and predatory behavior, illegal if it happened within American states.