NAM President Engler: Stick to the Trade Bargain

By July 11, 2007Trade

In May, Congressional leadership and the Administration hammered out an agreement, a political understanding, that respected the new dynamic on trade that resulted from the November elections. By acceding to the leadership’s demands to add labor and environmental protections — a major concession, the first of its kind — the Administration and their fellow and trade advocates in Congress won assurances that pending trade agreements with Peru, Panama, Colombia and Korea would move ahead. The NAM issued a news release supporting the bargain.

But right before the Independence Day recess, the House leadership and protectionist Democrats said, in essence, “Well, hold on. We want more assurances. We want our trade partners to act first, in exactly the way we want them to. Or else, no agreements.” The June 29th news release is available here, and a very harsh Wall Street Journal editorial, “Trade Double Cross,” is here, linking the protectionism to organized labor’s demands. Rep. Sander Levin (D-MI) followed with an e-mail to colleagues on the Peru and Panama agreements, as reported in this Reuters story.

To U.S. business and workers who benefit from expanding exports, the new demands are a setback; to the foreign governments and citizens we are dealing with, they are being seen as a humiliation.

NAM President John Engler sent a letter to the Hill on Monday expressing disappointment in the change in course, urging leaders to return to the bipartisan bargain and act expeditiously on trade.

Given the sheer number of bilateral and regional trade agreements currently under discussion around the globe today, it is difficult to believe that the United States would choose this moment to withdraw from these job-creating discussions to open foreign markets. Every week, new free trade agreements (FTAs) are announced or concluded that do not inlcude the United Sates. These represent opportunities for our competitiors and they will threan economic prospects for the United States.

The NAM supports the bipartisan trade policy agreement recently reached between Congress and the Administration. It is the first time the NAM has supported some of the language that was included. We have do so because we udnerstood it would clear the way for the four pending bilateral FTAs to move foreward for a vote in Congress. I am extremely disappointed to see that, despite the support that the NAM and others in the busienss community have put forth, that additional roadblocks are being placed in front of specific agreements.

It is essential that you stick to your original bargain and that we have a July vote on the Peru FTA, and a Panama vote as soon as possible. Movement on the Korean and Colombian FTAs is also essential. Your problems with those agreements needs to be discussed openly and honestly, and I believe your concerns can be put to rest. Both the countries have made extraordinary efforts to meet the requirements of the bipartisan accord.

The letter also urges Congress to extend ad hoc the Trade Promotion Authority, which expired June 30, to allow the Doha Round to reach a conclusion.

The NAM supports these trade agreements because they lower or eliminate foreign barriers to U.S. exports of manufactured goods. The experience with the Central American Free Trade Agreement shows the great economic potential: A $1.2 billion trade deficit with the CAFTA countries turned into a $1 billion surplus in a single year. Exports create jobs.

As NAM President Engler concluded in his letter, “Delaying consideration of Peru and Panama, coupled with outright rejection of a TPA extension and consideration of the Korea and Colombia FTAs, is the wrong direction for Congress and the American economy.” Let’s get headed back in the right direction.

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