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555 Dirksen Office Building
Washington, DC 20510
Ph: 202.224.6342
Fax: 202.224.1100
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Raleigh Office:
310 New Bern Avenue
Suite 122
Raleigh, NC 27601
Ph: 919.856.4630
Toll Free: 866.420.6083
Fax: 919.856.4053
Salisbury Office:
225 North Main Street
Suite 304
Salisbury, NC 28144
Ph: 704.633.5011
Toll Free: 866.420.6084
Fax: 704.633.2937
Western Office:
401 North Main Street
Suite 200
Hendersonville, NC 28792
Ph: 828.698.3747
Fax: 828.698.1267
Eastern Office:
306 South Evans Street
Greenville, NC 27835
Ph: 252.329.1093
Fax: 252.329.1097
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Articles
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CAFTA WILL EXPAND OPPORTUNITIES
Author: Senator Elizabeth Dole
Publication: Greensboro News and Record |
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July 16th, 2005 - Many North Carolina industries are at a crossroad, looking for new ways to compete and sell their products in the global marketplace. We must find innovative ways to create jobs and growth in our traditional industries, and I believe CAFTA will support these goals.
After careful deliberation and consultation with North Carolina employers - and after obtaining key commitments from the Bush administration to address textile industry concerns - I voted for the Dominican Republic and Central America Free Trade Agreement. On balance, I believe CAFTA will provide valuable opportunities for North Carolina businesses, including enhanced access for our products that will support thousands of jobs across our state.
Today, our products face significant tariffs in the CAFTA countries. Upon entering the agreement, more than 80 percent of American exports to that region would become duty-free, with remaining tariffs phased out over 10 years. Agriculture, electronics, transportation equipment, pharmaceuticals and other sectors would benefit tremendously from having the same duty-free status that most products entering the U.S. from that region currently enjoy.
Pork products - a valuable North Carolina commodity - currently face up to 40 percent tariffs in the region, and some countries now impose a 164 percent tariff on poultry, another major export. Under CAFTA, duties on soybeans, tobacco and other North Carolina crops would be eliminated over time, and the American Farm Bureau estimates that U.S. farm exports to Central America could grow by $1.5 billion per year.
CAFTA will benefit another important North Carolina economic sector, the textile industry. Many companies have informed me that creating a market for their products in Central America, where American fabric would be transformed into apparel, is fundamental to their strategy to survive and prevent jobs going to China. Clothing made in China uses virtually no American fabric, but the agreement ensures that more than 90 percent of apparel made in the region will be sewn from U.S.-made fabric and yarn.
Much work was undertaken on behalf of the textile industry to address concerns with the agreement, and now CAFTA enjoys wide, if not universal, industry support. Of particular concern was the rule of origin for non-visible pocketing and linings. In its current form, CAFTA allows non-visible pocketing and linings to be sourced from anywhere in the world, including China, while visible linings must be sourced regionally.
I raised this with the administration, and U.S. Trade Representative Rob Portman gave me a commitment: His office will seek an amendment clarifying that pocketing would have to originate in one of the CAFTA countries, including the U.S. Under the Caribbean Basin Initiative, which covers CAFTA countries, U.S. textile companies ship approximately $100 million in pocketing and lining fabric to the region annually, a significant business for North Carolina companies. This amendment is critical to helping save North Carolina textile jobs.
At my urging, the administration pressed Nicaragua to address concerns that it would interpret a provision to allow Chinese fabric to enter the U.S. through Nicaragua in competition with fabric from U.S. textile manufacturers. The administration obtained a guarantee from Nicaragua that it would not interpret the provision in a manner harmful to U.S. fabric manufacturers. I also pushed for an agreement with Mexico to improve transshipment enforcement provisions to prevent Chinese fabrics from being substituted for Mexican or American fabric. Mexico agreed to improve its transshipment enforcement. These successful changes, supported by the majority of the textile industry, significantly weighed in my decision to support CAFTA.
These, and earlier successes, are key to the industry's future. I have successfully secured funding for - and pressed the Department of Homeland Security to hire - customs agents assigned to keep out illegal textiles. Additionally, the Commerce Department agreed to my request to expedite the release of import trade data so the China safeguard mechanism is used effectively. The recent decision to use the China safeguard mechanism demonstrates the administration's willingness to use enforcement mechanisms in agreements like CAFTA.
The U.S. Chamber of Commerce predicts that under the agreement, U.S. sales to the CAFTA region could expand by more than $3 billion in the first year. The region is already a significant market for North Carolina exports. In 2004, we shipped $1.7 billion in merchandise there, the third largest total among the 50 states, accounting for 9.5 percent of the state's total global exports.
As markets expand for our industries, so too should opportunities for North Carolinians. While CAFTA is not perfect, the agreement puts us on the road to export growth and job creation.
Elizabeth Dole is a U.S. senator from North Carolina.
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