High-Tech Industry Hails House Passage of Trade Agreement

The treaty was signed last May by the Bush Administration and the 6 CAFTA-DR nations’ leaders. Under it, the Dominican Republic, Guatemala, Honduras and Nicaragua are to join the World Trade Organization’s Information Technology Agreement (ITA), immediately ending tariffs on 80% of American industrial exports to the nations. The other 2 countries, El Salvador and Costa Rica, already belong to ITA and provide tariff-free access to IT exports from the U.S., officials said. Of 202 House Democrats, 15 voted for the measure.

TechNet CEO Lezlee Westine called CAFTA-DR an historic agreement important to American innovation sector’s future. She said the agreement also will eliminate high piracy rates in CAFTA-DR nations by boosting penalties and strengthening laws. Information Technology Industry Council (ITI) Pres. Rhett Dawson praised lawmakers for green-lighting the treaty, a 2005 technology industry priority. “This one was closer than we would have liked, but a win is a win,” Dawson said: “Not only will this open up a significant new market for high-tech goods, it also shows the world that the U.S. is still committed to free trade. That will be incredibly important as we work for greater market access through the next round of the World Trade Organization.”

The Electronic Industries Alliance (EIA) noted in its 2004 Policy Playbook that free trade agreements are a critical part of international trade, allowing companies to compete on level playing fields while protecting consumers from hidden import taxes on merchandise. EIA Pres. Dave McCurdy said Congressional approval of CAFTA-DR signals that the U.S. “stands with the fledgling democracies of Central America” and encourages economic growth, pluralism and democracy. IT firms big and small will benefit from the pact’s provisions on more market access, e-commerce and intellectual property (IP), the Assn. of Competitive Technology (ACT) said. CAFTA-DR gives high-tech entities IP protections and e-commerce opportunities they need in Central America, the group said. “This is a growing market for information technology and a source of technological innovation,” ACT Pres. Jonathan Zuck noted. The high-tech sector has been lobbying Congress for 6 month on behalf of the treaty.

U.S. Trade Representative (USTR) Rob Portman lauded the House for its vote of confidence on CAFTA-DR. “This win sends a powerful signal to the region and the world that the United States will continue to lead in opening markets and leveling the playing field,” he said, noting the Bush Administration has gotten free trade agreements with 10 since passage in 2002 of the Trade Promotion Authority, with each opening markets to U.S. exports and creating U.S. jobs. “With CAFTA-DR behind us… I call on both supporters and opponents to move ahead and work together to continue to open markets and expand prosperity,” Portman said. President Bush applauded the vote, saying he looks forward to signing the legislation into law.

House Majority Leader Tom DeLay (R-Tex.) called CAFTA-DR “an affirmation of America’s commitment to economic security and national security.”

The Computer & Communications Industry Assn. welcomed passage but voiced concern that CAFTA-DR is the latest example of what the group calls a “disturbing trend in bilateral trade agreements.” CCIA officials said trade pacts should focus on “true trade issues,” not stress domestic commercial regulatory matters. “We have been increasingly wary of the inclusion of overly broad intellectual property protections in free trade agreements,” CCIA said: “Micromanagement of other nations’ domestic laws is unwise and is being used to create legal regimes more restrictive than U.S. domestic law.” The group called IP protection crucial said parts of the agreement, such as those on circumvention of technological measures, are so detailed they might inhibit the evolution of U.S. law. “The merits of the Digital Millennium Copyright Act are still being debated domestically, and important legislation is pending in Congress to amend it. Necessary and productive debates and legislative flexibility would be preempted by the continued inclusion of such detailed provisions in trade agreements,” officials said.

Opponents were equally outspoken on CAFTA-DR’s passage. House Democratic Leader Nancy Pelosi (Cal.) took to the floor late Wed. night, calling CAFTA-DR “a step backward for workers in Central America and a job killer here at home.” Rep. Kucinich (D-O.) said the deal will hurt U.S. and Central American workers, who will be “much more likely to lose their jobs than find better ones.”

Unions denounced the measure too. WashTech organizer Marcus Courtney said the slim majority by which the measure passed shows Congress is “increasingly growing weary of trade deals that undermine the economic security of middle class America.” He said the narrow approval shows lawmakers are hearing from constituents who have expressed concerns around trade policies that “favor the rights of multinational corporations over the rights of workers and the environment.” “Trade politics will increasingly become a hotter topic in the mid-term elections,” he predicted.