Analysis says CAFTA would cost money

Billings Gazette ^ | July 22, 2005

[hedgetrimmer]

The Bush administration's free-trade agreement with Central America would cost taxpayers $50 million a year in loan forfeitures by sugar farmers, the Congressional Budget Office says.

An administration official said Thursday that the analysis was unrealistic and that there would be virtually no cost under sugar provisions in the deal.

The CBO released its estimate as House leaders planned for a vote next week on the Central America Free Trade Agreement. It would remove or lower trade barriers with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and he Dominican Republic.

Overall, CAFTA would cost the U.S. about $4.4 billion over the next 10 years, primarily in lost tariffs, the CBO said.

Under CAFTA, those countries could ship more sugar to the United States. The CBO said the influx would push prices down and force farmers to forfeit government loans on their crops, costing taxpayers on average about $50 million annually through 2015.

"Not only would CAFTA threaten the livelihoods of thousands of U.S. sugar farmers and workers, but now we have proof that it's a bad deal for taxpayers and would be a revenue loser, too," said Republican Rep. Mike Simpson of Idaho, a state where sugar beets are grown.

Wariness from sugar farmers has generated fierce opposition on Capitol Hill, although a broad array of other farm groups support the deal. The Senate endorsed CAFTA last month on a 54-45 vote.

In a concession from the White House, Agriculture Secretary Mike Johanns has promised to use his authority to keep excess Central American sugar off the U.S. market.

Johanns can buy excess sugar from CAFTA countries to use for things other than food, such as sugar-based ethanol fuel. He can also give away other U.S. crops to CAFTA countries that agree not to ship sugar to the United States.

[hedgetrimmer]

Overall, CAFTA would cost the U.S. about $4.4 billion over the next 10 years, primarily in lost tariffs, the CBO said.

[hedgetrimmer]

"If I own a company in Costa Rica and decide I want to come locate to Napoleonville, I can bring my business and all the people that work for me and I don't have to go through all of the information processes," Melancon said. "As I appreciate it, they're not necessarily bound by the laws of the United States because that's part of the deal with Central America."

--U.S. Rep. Charlie Melancon, D-Napoleonville

[hedgetrimmer]

The costs of CAFTA keep growing.

[hedgetrimmer]

Who will have to raise taxes?

[B4Ranch]

I can't imagine anyone voting for this. We need to let them know what the costs will be ....... unemployment due to lack of votes.

[Iron Matron]

CAFTA can fail if US Citizens who opposed to such trade agreements would go ahead and pay the higher costs of USA made goods, when possible. We need to support US Industry- not play nanny to Countries who are capable of helping themselves.

CAFTA and NAFTA are purely political and drive up costs to US Citizens. Why are US Citizens giving in to what I can only call blackmail? We should demand that point of origin be placed on all products so we can buy products produced in the USA whenever possible and not accidentally support foreign regimes.

[Stellar Dendrite]

But..but CAFTA is goooooood.....baaaa baaaa went the sheep

[Iron Matron]

Yeah, it's getting to where I have to carry shears just to walk down the street unimpeaded.

BTW, George Allen '08?

Please excuse my stupidity..who is he?

[Stellar Dendrite]

"Please excuse my stupidity..who is he?"

Stupidity excused...j/k :)

He is the former gov and current senator from VA:
http://allen.senate.gov/

http://www.issues2000.org/Senate/George_Allen.htm

Based on what I've read he's as close to a conservative you can get these days, although he did vote against a ban on suing gun manufacturers (blaming them for crime) and he voted for the socialist prescription drug plan. He sounds tough on borders though.

[Toddsterpatriot]

Overall, CAFTA would cost save the U.S. consumer about $4.4 billion over the next 10 years, primarily in lost reduced tariffs, the CBO said.

[hedgetrimmer]

He's too closely tied to the CFR for my taste.

[Dat Mon]

I would like some enterprising financial type who has studied this trade agreement to post what the projected net amount of GOODS traded and net amount of labor SERVICES traded are.

I suspect this agreement is all about SERVICES.... NOT GOODS.

I understand that the net Central American goods market is about equal to the normal commerce of an average mid size American city.

The other fact is that we don't need this agreement to end sugar subsidies...all Congress has to do is stop the sugar growers funding every year when they approve those huge Omnibus spending and farm bills.

[Iron Matron]

Thanks for the link..I'll check it out.

His vote on suing gun mfgs. bothers me a bit, but I admit I have become a one-issue voter and right now that issue is controlling illegal immigration. So, he's worth looking at.

[Stellar Dendrite]

Do you have a citation for that?
If so, I will have to revamp my tagline.....

[hedgetrimmer]

Overall, CAFTA would cost save the U.S. consumer the US paycheck to paycheck taxpayer about $4.4 billion to make up for lost revenue from the constitutionally correct way to fund the federal government, tariffs.

[Stellar Dendrite]

Sounds good....then we can throw more money at socialist education and implement a socialist healthcare system (ie gov't enforced death)....then no one will have any money, we can all be "equal"!!!! YAY!!!!!!

[Toddsterpatriot]

Overall, CAFTA would cost save the U.S. consumer the US paycheck to paycheck taxpayer about $4.4 billion to make up for lost revenue from the constitutionally correct way to fund the federal government, tariffs.

You are truly clueless.Raising the price of goods by $4.4 billion costs consumers $4.4 billion and doesn't save taxpayers anything.

You want consumers to have less money and the government to have more!! Alinski? Ha, you're a big government liberal.

[hedgetrimmer]

The federal government doesn't have the right to decide that based on a "free trade" agreement. If they want to cut off any price support program thats one thing, but to do it because they favor foreign producers in a "free trade" agreement is really in opposition to the idea that the purpose of goverment is to DEFEND INDIDIVUAL RIGHTS, no to pave the way for transnational corporations to put domestic industries out of business.