Agreement has friends, foes in S.C.

WILLOW DUTTGE, Washington Correspondent

WASHINGTON -- The health of America's manufacturing industry was a hot topic in Congress on Thursday with the nail-bitingly close final vote on CAFTA, which is certain to be signed by President Bush.

After the CAFTA vote, Rep. Bob Inglis, R-S.C., who voted for the agreement, said, "By partnering with our neighbors to the south, we can better compete with China."

The president touted CAFTA as "more than a trade bill; it is a commitment of freedom-loving nations to advance peace and prosperity throughout the Western Hemisphere."

But the American Manufacturing Trade Action Coalition called Thursday "a sad day for the U.S. manufacturing work force."

And Richard Dillard of Spartanburg-based textile and chemical giant Milliken & Co. said, "We're certainly disappointed, but we're not discouraged."

Not all South Carolina textile officials were upset.

"I'm thrilled with the vote," said Smyth McKissick, president of Alice Manufacturing.

The early Thursday morning vote was 217 to 215; with Rep. Charles Taylor, R-N.C., maintaining his nay vote was accidentally not counted, thereby making the vote 217 to 216. The tight vote demonstrated the strength of both sides.

Some proponents argue CAFTA will allow more U.S. exports to Central America, thereby creating jobs.

Inglis and other textile-interested leaders support CAFTA because of forthcoming side agreements limiting China's ability to import goods to the region and helping to level China's advantage over U.S. manufacturers.

Opponents argue the side agreements aren't guaranteed, and that CAFTA could cost textile jobs in the United States.

Dillard argued that CAFTA, which passed the Senate 54 to 45 on June 30, doesn't do enough.

"None of these fixes that are intended to reel China in are part of this agreement," he said.

Sen. Lindsey Graham, R-S.C., voted against CAFTA.

"The efforts to make CAFTA more textile-friendly I hope pay off," but he is "very skeptical" the side agreements will be effectively implemented.

"I worry that (CAFTA) is going to be another way for cheap labor and China combined to dislocate textile jobs and manufacturing jobs," Graham said. "Time will tell."

The same wait-and-see philosophy goes for China's currency movements.

Graham and Sen. Charles Schumer, D-N.Y., met Thursday to discuss ramifications of China's now more conservative statement on its currency revaluation.

On July 21, for the first time since 1994, China moved the yuan's value to the dollar by about 2 percent, from 8.28 to 8.11 yuan to the dollar.

The People's Bank of China said the yuan's value would be based on a "basket of currencies," and would be allowed to float no more than 0.3 percent daily.

The People's Bank of China said Thursday the 2 percent move did not imply "further actions in the future," and blamed the press for overstating the currency move.

Graham has said the reportedly undervalued yuan gives purchasers of China's goods a 15 to 40 percent discount, and therefore an unfair advantage over America's manufacturers.

"Literally thousands of jobs are at stake here," he said, assuring he would closely monitor the situation.

CAFTA proponents and opponents who are supporters of the textile industry remain aware of China's competition with the United States.

"China hangs over everything we do," Graham said about CAFTA and the revaluation of the yuan.