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CAFTA-DR Bill Bundled to Create Trade Omnibus – Likely to Pass Thursday

Congress is on track to approve a pending omnibus trade agreement covering AGOA, Burma, and the CAFTA-DR before the end of this week. Last month the omnibus bill was created by bundling three related trade measures: AGOA extends the 3rd country fabric provision for three years. Sanctions on Burma, which expired last Thursday, will be extended. Finally, a series of technical fixes to CAFTA-DR, a free trade bill covering the Central American free trade zone and the Dominican Republic, will exempt elastic fabric and yarn categories from tariffs.

The politics of the bill have been difficult to negotiate, but early objections over funding concerns have largely been addressed, eliminating the last major concern. The Senate will delay passage until the House approves a companion bill. This will facilitate the creation of a jointly acceptable final version. Once the House takes action, the Senate will automatically pass the bill, and it will be sent to the President.

It is expected that the bill will be passed on Thursday. Its provisions will be implemented over the next 18 months. President Obama has shown strong support for free trade agreements and is likely to sign this one promptly.

The bill is expected to create new opportunities within the CAFTA-DR free trade zone, and also improve access to markets in Africa. Provisions regarding Burma could have a negative impact on the growth of US-Burma relations by potentially restricting trade if the country backslides on its political commitment to democracy.