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IN THE NEWS – Central America Free Trade Agreement - 2004-05-30

Broadcast: May 29, 2004

This is Steve Ember with In the News in VOA Special English.

The United States has signed a trade agreement with five Central American countries. The five are Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Trade ministers from the six countries signed the agreement in a ceremony Friday at the Washington headquarters of the Organization of American States. The new treaty is known as the Central America Free Trade Agreement, or CAFTA.

The Dominican Republic is expected to join CAFTA at a later date. All seven countries will be included in the agreement when it is presented to the United States Congress for approval.

President Bush first announced his plan to negotiate a free trade agreement with Central American countries in two-thousand-two. The negotiations were completed at the end of last year.

CAFTA generally would be an expansion of NAFTA -- the North American Free Trade Agreement. NAFTA was completed in nineteen-ninety-four. It links Canada, Mexico and the United States.

The Central America Free Trade Agreement is similar to NAFTA. It would bring the Bush administration one step closer to its goal of creating a free trade area. The area would include every country in the western half of the world, except Cuba. The Bush administration is hoping to reach an agreement on the Free Trade Area of the Americas by January two-thousand-five.CAFTA would end taxes on more than eighty-percent of industrial and other goods exported from the United States to Central America. It also would cut taxes on more than fifty-percent of American farm products to Central America. Taxes on most other goods also would be ended over time.

Most goods from Central America and the Dominican Republic already enter the United States without taxes or other restrictions. The Bush administration says the agreement would provide similar help to American businesses. It says the agreement also would strengthen trade and investment ties, and create jobs among all the member nations.

But opponents say CAFTA will harm workers, farmers and the environment. Labor groups say the agreement would make it more profitable for American businesses to move jobs to Central America. Some members of the United States Congress say it fails to protect American workers from foreign competition. Critics also say it will weaken labor rules designed to help Central American workers.

The Bush administration says the agreement’s labor and environmental rules extend beyond earlier trade agreements. It says CAFTA follows trade rules that members of Congress established in two-thousand-two. Central American nations have criticized the United States and other industrial nations for failing to fully open their markets to trade from developing areas.

In the News, in VOA Special English, was written by Cynthia Kirk. This is Steve Ember.