Oman, Peru and the Benefits of Exports

By July 11, 2006Trade

The Wall Street Journal’s lead editorial today takes a good look at the current state of congressional play on trade issues. Last month, the Senate has passed a free trade agreement (FTA) with Middle Eastern ally Oman (NAM news release here), but labor is organizing opposition in the House to “fire up the base” for the 2006 election, as the Journal puts it. Waiting in the wings is congressional action on a FTA with Peru, which would allow some 80 percent of U.S. industrial and textile products to immediately enter Peru duty free. (A real-world example of the benefits comes from NAM member Caterpillar: Peru’s 12 precent tariff on mining and construction equipment — adding $100,000 to the cost of an off-highway truck — would go away.) Agreements with Oman and Peru would open up those markets to U.S. exporters, including manufacters of all sizes. In the process, Congress would be addressing the nation’s trade deficit, 90 percent of which results from countries we have no trade agreements with. Keeping those countries markets closed or prohibitively expensive does little more than punish U.S. exporters.

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