On Trade Agreements, the Longer We Wait, the More We Lose

By November 20, 2009General, Trade

During a question and answer period today with members of the National Association of Manufacturers, Secretary of Commerce Gary Locke acknowledged the U.S. loss of market share as a consequence of not enacting U.S. trade agreements with South Korea and Colombia. Secretary Locke:

What is interesting to note is that, for instance, on the Korea trade agreement, the European Union has signed a tentative agreement with Korea, and it will result in substantial market entry for companies from Europe, and the longer we wait to pass an agreement, to ratify an agreement with Korea, the more the relationships between Korean entities and European counterparts will have been solidified. And of course, once you have a business relationship, you’re not just going to jettison that relationship just because someone else is new knocking on your door.

And so we need to finalize that agreement as quickly as possible and try to get it to the Hill. But there are a few outstanding issues that most everyone knows about and we need to address that, and Ambassador Kirk is eager to do that.

Quite frankly, we know that many in Canada and others are going to have unparalleled access to Colombia, and Colombia has been a terrific partner and ally with the United States on a whole host of issues. And so we know that the longer we wait, that the harder it is for the American companies to catch up.

Right!

Secretary Locke’s comments were prompted by a question from a construction equipment manufacturer who noted the Panama Canal expansion project and the huge size of the Colombian market for the company’s products, especially in the mining industry.

This Sunday, November 22, marks the third anniversary of the signing of the U.S.-Colombia Free Trade Agreement. And yes, indeed, the waiting becomes increasingly difficult to justify, especially since the bipartisan agreement between the Bush Administration and Congress in May 2007 addressed the environmental and labor issues previously used to reject the pending FTAs.

Most observers believe the votes are there in Congress to enact the U.S.-Colombia and U.S.-Panama free trade agreements, and most probably for the U.S.-Korea pact, as well. It’s up to the President to submit the agreements to Congress for action.

UPDATE (4 p.m.): For context, the Secretary’s comments before the above quote:

[The President] has been emphasizing America’s desire to move exports and these agreements. And Ambassador Kirk has been instructed to work with the Panamanians and the Colombians on a few items that are outstanding, as well as with Korea. The President publicly indicated that they want a very aggressive, and have an ambitious agenda with respect to the Doha round of the World Trade agreement, or the World Trade Organization. So, it may not be a formal trade speech, but certainly if you connect all the dots and listen to all the remarks that the president has been making about trade, he has been expressing his commitment to those.

Now the timing of when these agreements will be finalized, or these side agreements, however it’s being approached, when they’ll be finalized, I can’t say. I know that Ambassador Kirk is on his way to Geneva right now, or next week, for talks with the WTO members about Doha. And he’s very excited, he’s chomping at the bit now to pursue the Trans-Pacific Partnership. Because we understand the value of trade. You’re right.

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