business & economy

Also in this section:
US-RP free trade pact stalled
Torrijos to veto parts of controversial public transportation law
Lunchtime on Avenida Peru

Costa Rica holds CAFTA referendum
Chorrera demolishes, China builds
Business & Economy Briefs

Republican officials upbeat about the deal, but the problem is that they don't control the Congress

Torrijos goes to Washington, but a free trade pact still looks doubtful

by Eric Jackson, mainly from other media

For a very long time most political analysts have presumed that the US-Panama free trade agreement would easily pass the US Senate by might have trouble passing in the House of Representatives. Now, however, the political arithmetic is changing on several sides of the equation.

On October 6, US Secretary of Commerce Carlos Gutierrez pleaded with the respective chairmen of the House Ways and Means Committee and the Senate Finance Committee, Charles Rangel (D-New York) and Max Baucus (D-Montana) to set dates for votes on the trade deals with Panama and Colombia. Without a debate or vote in the Senate Finance Committee, the agreement can't get to the Senate floor for the possibility of approval, and likewise with the House Ways and Means Committee.

This past August the schedule was to vote on the Panama agreement second, after Peru, and possibly never on Colombia. The Colombian treaty is expected to be defeated in the House because of the frequent murders of labor activists in that country. But then on September 1 Panama's National Assembly chose Pedro Miguel González (PRD-Veraguas) as its president, despite US warnings that this would create problems because there is a US warrant for González's arrest on terrorism charges arising from the 1992 drive-by slaying of US Army Sergeant O. Zak Hernandez.

Now Baucus has declared that unless and until the González issue is "resolved," there will be no debate on a free trade agreement with Panama in his Senate committee. Rangel has been more guarded in his public statements, merely declaring the González issue to be "an 800-pound gorilla in the room."

Worsening relations between the Democrats and Republicans over the Iraq War issue are thought to be an impediment to compromises on other issues, especially given the disenchantment with many Democratic voters with the failure of congressional efforts to end the war. The longer the stalemate over González lasts, the farther the United States will be into the 2008 election cycle and the less willing Democrats will be to cast unpopular votes in the name of bipartisan cooperation.

On the Republican side, after initial stern denunciations of the Panamanian legislature's choice of a leader the Bush administration has been arguing that treaties are between nations and should not rise or fall over issues related to individuals. But many GOP lawmakers were elected running on hard-line anti-terrorist platforms and thus don't want to be in a position to be accused of compromising with people who kill American soldiers. Moreover, public opinion polls in the USA are now showing for the first time that a majority of Republican voters believe that free trade agreements are bad for the country and bad for themselves personally. A majority of Democratic voters have long seen it that way, which is why for a free trade deal to pass either the House or the Senate, most of the votes must come from Republicans.

On December 4, after a sudden trip to Washington in which Torrijos met with Secretary of State Condoleeza Rice and other Bush administration officials, the Panamanian government was acknowledging that the González affair had clouded the free trade pact's chances.

When first elected as the National Assembly's president González said that if he became an impediment to US-Panamanian economic relations he'd step down. Later, he hardened his position and said that he would not resign from that post. The rallying of most of the PRD and some from other parties behind González as a matter of nationalist principle has made it difficult for him to step aside without his party appearing to be servile to foreign interests and losing some domestic support as a result.

In all of the clouds, there was an apparent ray of hope: the apparent "yes" victory in Costa Rica's October 7 referendum on the Central American Free Trade Agreement. Some Capitol Hill analysts had warned that a "no" victory would have meant the end of all new bilateral free trade agreements between the United States and Latin American or Caribbean countries. A "yes" victory, although by only a narrow margin, may have saved the possibilities for other agreements being ratified by the US Congress.

US-RP free trade pact stalled
Torrijos to veto parts of controversial public transportation law
Lunchtime on Avenida Peru

Costa Rica holds CAFTA referendum
Chorrera demolishes, China builds
Business & Economy Briefs