The Central American Free Trade Agreement (CAFTA) will face a tough battle this week as Congress returns from its July 4 recess. The measure already successfully passed two major hurdles in late June, however, the agreement may see stiff opposition in the House in the coming days.

The full Senate and the House Ways and Means Committee both approved the measure (S1307, HR 3045) on June 30. Some Congressional insiders are reporting that despite these positive signs, final approval of the CAFTA will need more than a narrow margin of support.

A vote on CAFTA is set to occur before the end of the month and supporters are cautiously upbeat. The amount of congressional support for the measure is unknown at this time.

Progress of the measure has been long-stalled due to sharp opposition from the U.S. sugar industry and organized labor. The groups argue that the agreement, in its current form, will not necessarily benefit free trade.

The agreement with Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua was signed in May 2004 and a sister pact with the Dominican Republic was completed a few months later.

MEMA strongly supports the passage of CAFTA as it would zero-out tariffs on U.S. exports of automotive parts and components and remove foreign trade barriers against remanufactured goods and cores.