A free-trade accord signed by Gov. Donald Carcieri '65 has Rhode Island lawmakers steamed over possible federal interference in state contract bids.
The Rhode Island House of Representatives voted Feb. 16 to take the power to enter into international trade agreements away from the governor, after it was discovered Carcieri committed state support to the Central American Free Trade Agreement, a U.S.-ratified pact with six countries to phase out tariffs and institute common environmental and labor standards.
The signatories of CAFTA, which is patterned after the 1994 North American Free Trade Agreement, are El Salvador, Costa Rica, Guatemala, Honduras, Nicaragua and the Dominican Republic, representing a $15 billion market in U.S. exports every year, according to White House press statements.
Under the agreement, companies located in CAFTA countries would have equal footing with domestic companies in procurement, or the process by which companies bid for state contracts. Signatory states that give preference to local companies could face trade sanctions or loss of funds from the federal government if a CAFTA panel finds them to be a "barrier to trade." The states would not be allowed to appeal the panel's decision without federal support.
Global Trade Watch, an anti-CAFTA nonprofit, reported that 19 state governors had signed the agreement, which bound their state to procurement rules as of Feb. 16. During deliberations, supporters of the bill said Carcieri ought to have discussed the letter with legislators first before signing on for the state, according to a Feb. 17 article in the Providence Journal.
While all of the countries in CAFTA must sign the agreement in order for it to go into effect, states can request to voluntarily withdraw from the agreement in order to uphold laws which give preference to local or state vendors - which a recently passed bill sponsored by District 3. State Rep. Edith Ajello, a Democrat, intends. The bill also calls for the state to invalidate all other free trade agreements made by Carcieri and previous governors
According to legislature records, Ajello's bill has been referred to the state Senate Committee on Government Oversight, but a spokesperson for committee clerk Herbert Couper would not immediately comment on when the committee would begin deliberations on the bill. District 35 State Sen. J. Michael Lenihan MAT '68, a Democrat who chairs the committee, said he had "no knowledge" of the bill as of yet.
Paul DeRoche, vice president for government relationships of the Greater Providence Chamber of Commerce, said he does not expect the Chamber of Commerce would take a position on the House bill.
