CAFTA passes, barely
The House passed the CAFTA bill by a razor-thin vote of 217-215 just after midnight last night. I stayed up to follow the roll call on C-SPAN, but the last dozen or so House members were tardy, and the the telecast went strangely blank for several minutes, and when it returned the tally had been finalized. This was a big relief for anyone who believes in Inter-American cooperation, but it was only a first timid step in that direction. As yesterday's Washington Post pointed out, the economic impact of CAFTA will be smaller than either proponents or opponents claim; its main direct effect will be of a political nature, reinforcing the fragile bonds between those countries and the United States. As shown on my Presidential chronology page, most governments in Central America have been moderately conservative in recent years. Some of them are under very heavy pressure from leftist parties, most notably Nicaragua, where Daniel Ortega's Sandinistas are doing all they can to sabotage democracy and capitalism. These die-hard opponents of freedom seem to share the agenda of the anti-globalization movement, those nihilistic misfits who try to wreak chaos whenever there is a summit of Western leaders.
The job of encouraging trade within the Northern Hemisphere is far from finished, however. The countries of Central America are simply too small and too poor to adequately regulate economic activity within their own borders, and they could vastly improve the overall prosperity and working conditions by encouraging a consumer-goods industrial sector that would take advantage of economies of scale. My trip to that region last February and March convinced me that Central America must pursue an economic union, tearing down all remaining barriers among themselves and allowing unhindered transit within the region, much as Europe has done. That is something they must do on their own, however, and the United States should stay out. As for the grandiose proposed "Free Trade Area of the Americas," I remain deeply skeptical.
One of the sad aspects of this vote was that it was cast on such strongly partisan lines. House Speaker Tom DeLay, who has been under political siege for the last several months, assured everyone that he had enough votes for passage, so this may count as vindication for his continuing effectiveness. As I wrote on June 22, Nancy Pelosi told the Democrat caucus that "A vote for CAFTA ... was a vote to keep the GOP in the majority." By viewing the issue in partisan terms, the Democrat leadership has cast its lot with the nihilistic anti-globalization movement. So much for progress.