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Welcome to "Ask the White House" -- an online interactive forum where you can submit questions to Administration officials and friends of the White House. Visit the "Ask the White House" archives to read other discussions with White House officials.

Carlos Gutierrez
Secretary of Commerce

May 12, 2005

Carlos Gutierrez
It's my pleasure to be a part of the Ask the White House online forum. I am honored I have the opportunity to discuss with you the benefits of CAFTA. Let me begin by telling you how humbled and grateful I am to serve in President Bush's administration. President Bush's pro-growth economic policies are helping our economy expand and are creating momentum that is leading to job creation. We have seen steady job gains and there are more Americans working today than at any time in our history. The unemployment rate at 5.2 percent is well below the average of the last three decades. However, we will not rest until every American looking for work finds a job.

I'll be happy to take your questions.

Catherine, from Michigan writes:
How is life in the public sector? What's the biggest challenge that your dealing with at the Commerce Department?

Carlos Gutierrez
It's great to hear from a Michigan native. Life in the public sector is great: very fast paced, very exciting. I am having a great time and I love the opportunity to serve the American public. I am focused on promoting the President's trade and economic agenda. Lately I've been spending much of my time talking to members of Congress, business leaders and small business owners about the benefits of CAFTA. I'm also focusing my time on other elements of the President's economic priorities such as job creation, ensuring that we have affordable and reliable sources of energy and holding our trading partners accountable to the trade agreements they made with us.

Raul, from el barrio harlem, ny writes:
Central America does not have the same labor requirments that we have. Why would we want to sign a trade agreement that cheats American workers?

Carlos Gutierrez
CAFTA fully meets the labor and environment objectives set out by Congress in the Trade Promotion Act of 2002 and makes labor/environment obligations a part of the core text of the trade agreement. The labor chapter of CAFTA is more robust than the U.S.-Jordan FTA in its inclusion of provisions on procedural guarantees for access to fair, equitable and transparent proceedings for the enforcement of labor laws.

CAFTA is specifically designed to respond, improve enforcement and expand resources that will benefit Central American workers. The answer to the enforcement problem is not to reject an FTA that promotes economic freedom and democracy.

Gary, from Virginia writes:
First of all, I think you're doing a great job as Commerce Secretary. Secondly, I've been hearing mixed messages about the pros and cons of CAFTA. Can you set the record straight and explain why this agreement would be good for small business owners like me?

Carlos Gutierrez
Gary, I’m glad you asked that question. Let me make the following point. America’s past and future economic growth is tied to free and fair trade and opening new markets for American exporters to sell their products. Preserving trade opportunities for America’s small business owners and entrepreneurs requires open markets. CAFTA is critical to remaining competitive around the world.

Here are some facts to consider.

Currently 80 percent of exports from the CAFTA region enter the United States duty-free. That number is even higher for agricultural goods at 99 percent. CAFTA will make more than 80 percent of U.S. exports of consumer and industrial products to Central America and the Dominican Republic duty-free.

Additionally, small and medium-sized businesses and their employees will benefit from CAFTA. In 2002, these businesses were responsible for an estimated 37 percent of the value of U.S. merchandise exports to the CAFTA region. It’s important to note that 97 percent of U.S. exporters are small and medium-sized enterprises and they are the engine that helps drive our economy.

The U.S. Chamber of Commerce predicts that U.S. sales to the region could expand by more than $3 billion in the first year. The American Farm Bureau estimates that U.S. farm exports could grow by $1.5 billion a year.

Raul, from iami, florida writes:
What impact will CAFTA have on the Sugar industry? I hear that the U.S. sugar industry will be wiped out if CAFTA passes. Is that true?

Carlos Gutierrez
Raul, this is an important question.

CAFTA will have minimal impact on the Sugar Industry—equivalent to about a spoonful a week for the average American. The increased sugar market access in the first year of the CAFTA agreement totals roughly a single day’s production for U.S. sugar consumption. CAFTA approval would not destabilize the U.S. program. Under the current Farm Bill, Congress put a so-called trigger in place that is set at 1.4 metric tons of total imports. The domestic sugar program is unaffected when imports are below this amount.

PABLO, from NEW MEXICO writes:

Carlos Gutierrez
We are answering the CAFTA critics by getting out the facts about this agreement and what it will mean for Americans from all regions of the country and from every economic sector. The CAFTA countries are good markets for American goods and services and with the increased market access under CAFTA, they will quickly become great markets for America. This agreement brings reciprocity to our trading relationship. The Central American countries already have access to the U.S. market. This agreement opens their markets to our companies. In addition, CAFTA will help to cement the gains on economic, social, and political reforms in Central America. The broad trends in the region are positive but we need to maintain that momentum by supporting the democratic, free-market aspirations of the CAFTA countries.

Kyle, from Youngstown Ohio writes:
i've read alot about your work to promote Cafta, but i'm having a hard time understanding why we need it when we already have Nafta.

Carlos Gutierrez
Interesting question Kyle.

NAFTA has been a tremendous success in opening up two-way trade with Canada and Mexico. Since it took effect in 1993, U.S. economic growth has been 44 percent, Canadian growth 46 percent, and Mexican growth also 36 percent. Without NAFTA, these countries would never have achieved economic growth on that scale.

CAFTA builds on that success. It is a free trade agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic (countries not included in NAFTA) and would create the second-largest U.S. export market in Latin America, behind only Mexico.

George, from flageo2004 writes:
1. What benefit will the US receive with this agreement? 2.What benefit will the Central American countries receive with this agreement? 3. I do not think that NAFTA was a success for the US, how will this agreement be different?

Carlos Gutierrez
George, I appreciate your question.

The CAFTA markets provide wonderful opportunities for U.S. businesses. Last year, U.S. exports to CAFTA nations nearly double from a decade ago, and U.S. investments were over $4 billion. And CAFTA levels an existing relationship. Since 80 percent of imports from the CAFTA region already come into the U.S. duty-free, CAFTA levels the playing field and gives U.S. manufacturers, farmers, and service companies broader access to this valuable market.

In response to the second part of your question, CAFTA is vitally important to the future of the fragile democracies in Central America. CAFTA will help strengthen these countries by expanding economic opportunity and introducing them to the core principles shared by self-governing, stable societies. Not only will CAFTA help grow jobs in the United States, but it will also strengthen democracy, build prosperity and make the western hemisphere more secure.

NAFTA, as I discussed with Kyle just a moment ago, has been very successful. Since NAFTA took effect, total trade between all three countries has more than doubled, more than 20 million jobs have been created, and the economies of Mexico, Canada and the United States have grown dramatically.

Pete, from Fort Payne, AL writes:
How do you justify that CAFTA will provide a U.S. market for exports when the total GDP of the 5 countries equals New Haven, CT or Orlando, FL? Would you not concede that the primary driving force is Multinational PAC's lobbying for cheap foreign labor sources?

Carlos Gutierrez
Great question, Pete.

Many people may not realize this, but the CAFTA region is the second largest U.S. export market in Latin America behind only Mexico and is the 10th largest U.S. export market in the world. In addition, two-way trade with these markets was more than $33 billion last year and U.S. exports to the region topped out at $16 billion– more than U.S. exports to Russia, India and Indonesia combined. The opportunities for U.S. businesses are tremendous.

One of the best ways to improve working conditions in Central America and the Dominican Republic is to have strong economic growth, combined with a comprehensive and targeted strategy to build the capacity of these countries to enforce their labor laws.

The defeat of CAFTA will do nothing to improve working conditions for a single worker in Central America or the Dominican Republic, and in fact will have the opposite effect, as tens of thousands of Central Americans and Dominicans stand to lose their jobs to China if the United States turns its back on CAFTA.

Cliff, from Brimfield, Ohio writes:
Secretary Guteirrez: This CAFTA-DR, is this similar to NAFTA? With the same issues and results expected. With gains for both sides. Kind of win, win. Thank You.

Carlos Gutierrez
NAFTA is a popular topic today, Cliff. CAFTA is a win/win for all the countries involved, in much the same way NAFTA has been a successful enterprise for the United States, Canada, and Mexico. As I mentioned earlier, each NAFTA country has grown considerably faster than it did in the previous decade, and each has seen a significant rise in productivity. CAFTA helps develops the same framework for prosperity in these Central American nation. At the same time, CAFTA will expand support for Democratic principles and will promote freedom and democracy.

Len, from Arizona writes:
Mr. Gutierrez, can you explain what the "Central American-Dominican Republic Free Trade Agreement (CAFTA-DR)" is all about? Thank you

Carlos Gutierrez
Thank you for the question, Len. In my answer to Cliff's question above I talk about some of the benefits of passing CAFTA. So I will outline here what CAFTA essentially is: a state-of-the-art agreement that strengthens all of our regional economies, strengthens our regional competitiveness, and strengthens the young and fragile democracies in the region.

The agreement builds on an already established relationship with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. By eliminating and phasing out taxes and tariffs—lowering the cost of doing business—U.S. companies will increase their exports to the region. And I’ve also discussed how CAFTA puts this relationship on a level playing field. CAFTA is also a smart strategic move. It will further integrate the hemisphere so that we can better compete globally, notably in Europe and Asia. And it would solidify America as the leading supplier to CAFTA countries at a time when China is making serious inroads.

Teresa, from San Antonio, TX writes:
Mr. Secretary, As a latino member of President Bush's cabinet can you give Latino kids some advise on how to achive success? Thank you for your time.

Carlos Gutierrez
Teresa, thank you for your question.

I would encourage you to focus on your education, work hard, and follow your values.

Will, from Detroit writes:
Secretary Gutierrez,Thanks for taking the time to take our questions. I am wondering if being a cabinet Secretary is very different from running a company like Kellogg? Thanks.


Carlos Gutierrez
Thank you for your question.

There are some differences, but the similarities are overwhelming. It is all about results, as well as people working behind a common agenda.

Kirk, from Milwaukee, WI writes:
Secretary Gutierrez -- Do you feel that your cultural heritage gives you an advantage when dealing with countries in Central America, whom have historically been opposed to many US economic policies, which they see as imperialistic tools?

Carlos Gutierrez
Being bi-cultural is a great asset in a multi-cultural world. Yes, it has helped me to speak both langauges and understand both cultures.

Carlos Gutierrez Thank you for all of the great questions. I enjoyed my first "Ask the White House" chat. Later this morning, I look forward to spending time with the President and the leaders of the Dominican Republic and the Central American countries. The president is working very hard for all Americans for greater hope and prosperity for the future and he is doing a great job and we should all be very proud that he is our president.

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