SpeakOut.com
 
Home News Opinion Issues Politics TakeAction Forum Links
 

Send This Article to a Friend    Printer-Friendly Version   
 

One Hemisphere, Ready or Not
by Michele Wucker
Thursday, November 25, 1999

Michele Wucker is the author of Why the Cocks Fight: Dominicans, Haitians, and the Struggle for Hispaniola (Hill & Wang, 1999).

If you were not watching closely, you probably did not notice when the Senate passed the first major free-trade legislation in five years earlier this month: a bill lowering import duties on textiles sewed in 48 nations in sub-Saharan Africa and 27 Central American and Caribbean nations. OK, maybe it does not set your toes tapping. What about hurricanes and starving African children? Does that get your attention?

When it comes to poor countries, America prefers "emergency" aid to forward-looking policies. Even then, we are likely to put our own short-term interests before those of the countries we are helping -- and ahead of what might help us, too, in the long run.

A promise forgotten

The last time Congress voted yes on a major free-trade bill was in 1994, when it created the World Trade Organization. Not coincidentally, the Clinton administration had hoped to showcase a completed African and Caribbean trade program when WTO ministers meet in Seattle later this month. No such luck. Congress still must resolve significant differences between the House and Senate versions before passing it along for a presidential John Hancock. The African Growth and Opportunity Act and U.S.-Caribbean Trade Enhancement package still falls far short of the hoped-for ringing endorsement for global free trade. Tellingly, its strong bipartisan support -- the Senate voted it in by an overwhelming 76-19 margin -- comes from legislators' desire to help debt-laden Africa and hurricane-stricken Central America.

Last year, Hurricanes Georges and Mitch claimed 20,000 lives, 2 million homes, and $10 billion of property and crops in the Caribbean and Central America. The storms momentarily shocked America out of a typical (not-so-) benign neglect of the region in our front yard. We promised relief in various forms. The first pledge we honored was temporary amnesty for immigrants from devastated Central America.

We should have opened the markets a long time ago
It is no surprise that the most-awaited promise -- that America would open our markets to these poor countries to allow them to create jobs -- will be the last one we meet. That is a mistake. We should have opened the markets a long time ago, not only because it is the right thing to do but also because it is in our best interest. Caribbean trade enhancement will expand markets for U.S. products abroad, promote political stability in our front yard, lower the prices American consumers pay, as well as reduce illegal immigration.

The case for open markets

Of every dollar that the people of the Caribbean Basin spend, more than 60 cents are for U.S. products -- a high level, especially compared to the 10 cents spent by Asian consumers. Last year, we sold nearly $21 billion to the 24 countries of Central America and the Caribbean, some $3.4 billion more than we buy from them. These countries are our second-biggest market for sewing machines and the fourth biggest for air conditioners. Textile industry officials estimate that this legislation would boost our exports by nearly $2 billion and create more than 35,000 American jobs. Export-related work, incidentally, pays 18% more than the average job.

Recognizing that lower trade barriers could create jobs on both sides, the Caribbean Basin Initiative reduced duties on many of the region's goods in 1984. It generated $9.3 billion in U.S. exports to the region, creating 306,120 jobs here by 1995. However, Caribbean textiles, apparel and footwear are still assessed duties. If they are assembled using American components (as nine-tenths are), the duty works out to about 8%, or twice the average U.S. level; this rises to about 20% if the components are not American.

These textile restrictions put Caribbean Basin countries at a serious disadvantage to Mexico after the North American Free Trade Agreement went into effect in 1994. NAFTA dramatically lowered duties on Mexican goods, even those made with non-U.S. components. In the last five years, Mexico's apparel industry has grown six-fold. Apparel exports from the poorer Caribbean Basin countries grew, too, to $8.3 billion in 1998, but by only a third the pace of Mexico, which sold the United States $5.1 billion in apparel. Last year, the Caribbean Basin lost U.S. market share, falling to 23.8% from 25.1% in 1997, with the difference going to Mexico and Asia.

The House version of the African/Caribbean trade program extends duty relief to garments using locally produced materials -- a plan supported by many Caribbean Basin trade unions, U.S. apparel makers and retailers. But the House version only applies to Africa, although the House Ways and Means Committee has approved a Caribbean version. The Senate version is a day late and a dollar short: It only grants duty-free status to apparel made of U.S. materials. This hobbles the target countries' ability to attract investment and create jobs beyond simple assembly.

American textile makers say the biggest threat to American garment jobs is from cheap goods from Asia. Since Asian currencies collapsed in 1997, more than 50 textile plants have closed in America and 30,000 American textile jobs have been lost. Strengthening the Caribbean partnership that already exists is the best way to generate export-related jobs in this hemisphere, and by extension markets for American goods and jobs. To this end, Congress should allow our neighbors to use local materials as well as the U.S-produced fabric that is used now. This would level the playing field with Mexico and help the whole region.

A helping hand rather than a hand out

Last year, in the aftermath of Hurricane Georges, the Dominican Republic found hope not in the pledges of international aid, but in their compatriot Sammy Sosa as he hit his 66 home runs for the Chicago Cubs. Born into poverty, he became an American hero and an example of how closely our neighbors' lives and dreams are tied with our own -- a needed reminder when it comes to our policies next door. This summer, Sosa wrote members of Congress urging them to lower tariff barriers: "If you give the people of my homeland, as well as others in the region, an opportunity to lift themselves out of the shadows of poverty, you will not regret it. The people of my country do not want a hand out, only a helping hand," he said. Amen.


Home | News | Opinion | Issues | Politics | TakeAction | Forum
Reproduction of material from any SpeakOut.com pages without written permission is strictly prohibited. , all rights reserved.
SpeakOut.com, 20720 Beallsville Road, Dickerson, MD 20842
info@speakoutfoundation.com
| Advertising information | Privacy and Use Policies