U.S. Business Community Expresses Strong Support for CAFTA; Harold McGraw III Urges Congressional Approval in House Ways & Means Testimony

WASHINGTON, D.C. - In testimony today before the House Committee on Ways & Means, Harold McGraw III, Chairman, President and CEO of The McGraw-Hill Companies, outlined the important economic and foreign policy implications of the U.S.-Dominican Republic-Central America Free Trade Agreement (CAFTA) and urged Congress to support the pact for the benefits it would bring to the United States' economy and to the region.

"CAFTA will benefit the United States by opening markets for manufacturing, services and agriculture, while at the same time, helping to create a stronger, more stable hemisphere," said Mr. McGraw. "CAFTA is more than just another trade agreement - it is the logical next step in America's decades-long work to promote stability and democracy in the region, and it is a symbol of continued U.S. support and engagement in open international markets."

Mr. McGraw serves as Chairman of the Business Roundtable International Trade & Investment Task Force and Chairman of the Emergency Committee for American Trade. His testimony, on behalf of both organizations as well as the Business Coalition for U.S.-Central America Trade, outlined six important reasons that the business community is united in support of CAFTA:

1. Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua represent a very important and growing market for U.S. exports. CAFTA countries represent the second largest export market in Latin America, and according to the U.S. International Trade Commission, U.S. worldwide exports would increase by $1.9 billion as a result of the CAFTA, more than with any other recent FTA partner.

2. CAFTA will level the playing field by opening markets for U.S. goods and services, benefiting our workers and farmers. Through unilateral preference programs overwhelmingly approved on a bipartisan basis by Congress since the 1980s, nearly 75 percent of CAFTA imports and 99 percent of CAFTA agricultural products already enter the United States duty-free.

CAFTA will make trade with our neighbors a two-way street. CAFTA will open their markets to our farm and industrial goods and our services by eliminating high tariffs, tariff rate quotas and non-tariff barriers.

3. CAFTA will sustain and expand textile and apparel partnerships and competitiveness. The CAFTA countries are the largest market for U.S. apparel and yarn exports, and the second largest market for U.S. fabric exports. CAFTA is critical to sustaining and expanding existing partnerships and to giving U.S.-CAFTA goods a competitive edge, particularly with the elimination of global quotas and increased competition from Asia.

4. CAFTA promotes strong labor and environmental protections. CAFTA promotes labor and environmental standards as Congress directed in the Trade Act of 2002. It incorporates binding commitments that each of the countries will enforce its labor and environmental laws, as the Trade Act sought, as well as the most robust labor and environment capacity-building mechanisms of any U.S. FTA.

5. CAFTA will help promote economic growth and bolster democracy and the rule of law. CAFTA will promote stability and the United States' own security in a region that was damaged by violence and civil wars only two decades ago.

6. Approval and implementation of CAFTA is vital to signaling continued U.S. support for global and hemispheric negotiations. By implementing CAFTA, Congress will signal to our trading partners and the world, that the U.S. continues to support liberalized trade and will continue to negotiate and implement agreements that expand trade and stimulate economic growth and development.

Mr. McGraw concluded: "Approval of CAFTA will send a powerful message to the rest of the world that regional and multilateral trade agreements should be pursued, and will promise a more open and fairer system to promote commerce among nations."

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Business Roundtable (www.businessroundtable.org) is an association of chief executive officers of leading corporations with a combined workforce of more than 10 million employees in the United States and $4 trillion in revenues. The chief executives are committed to advocating public policies that foster vigorous economic growth and a dynamic global economy.

The Emergency Committee for American Trade (www.ecattrade.com) was founded more than three decades ago to promote economic growth through expansionary trade and investment policies. Today, the annual sales of ECAT companies total $2 trillion, and the companies employ approximately five and a half million people.

The Business Coalition for U.S.-Central America Trade (www.uscafta.org) comprises over 400 companies and associations representing all major sectors of the economy with members in all 50 states that have come together to support implementation of the CAFTA. The Business Coalition was formed to support the negotiation of a comprehensive and high standard agreement. Once those negotiations were completed, the Business Coalition has worked to support the implementation of the CAFTA by the U.S. Congress.

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