Bush finally signs CAFTA

U.S. President George W. Bush signed into law the Central American Free Trade Agreement (Cafta), a top legislative priority that Bush won only by the narrowest of margins after a bitter fight in Congress over the direction of U.S. trade policy.

Bush cast the U.S.-Central American Free Trade Agreement, or CAFTA, as "more than a trade bill," stressing possible benefits for U.S. national security in a bid for support from a public worried about jobs leaving the United States.

As he put ceremonial pen to paper, the president declared Cafta good for the U.S. and said it would "advance peace and prosperity" throughout the region, Forbes reports.

Flanked by Secretary of State Condoleezza Rice at an East Room signing ceremony, Bush said the agreement would fortify Central American governments economically and politically against "forces that oppose democracy, seek to limit economic freedom and want to drive a wedge between the United States and the rest of the Americas."

The pact with six Central American countries squeaked through the House of Representatives last week after a last-ditch lobbying blitz by Bush and his top aides to win over reluctant Republicans, Reuters reminds.

Senate Finance Committee Chairman Chuck Grassley said CAFTA's passage was "important for building momentum" in global trade talks.

U.S. Trade Representative Rob Portman called it "a strong signal to the world that the United States is committed to market liberalization."

But the razor-thin margin of victory - 217 to 215 - could be a sign that Bush will have trouble pushing through any future trade agreements.

Next up in the patchwork of Secretary of State Condoleezza Rice free-trade deals the multilateral-wary administration is working on: pacts with Bahrain, Thailand and the Andean countries of South America.

The Bush administration countered that CAFTA's labor provisions were the strongest ever. It has pledged to support $160 million in aid to CAFTA countries over the next four years for labor enforcement and environmental programs.

The pact could boost U.S. farm exports to the region by $1.5 billion annually, according to the American Farm Bureau Federation.

Still, the White House had a harder time rounding up votes for CAFTA than for any other recent trade pact because of Democratic opposition and concerns of Republicans in textile and sugar-producing states that feared job losses.