U.S. Offers Trade Agenda, Other Countries — Trade Action

By March 4, 2010Trade

U.S Trade Representative Ron Kirk appeared before the Senate Finance Committee Wednesday to formally present the President’s 2010 Trade Policy Agenda, and as expected, express support for passage of the three long-pending free trade agreements (FTAs) with Colombia, Korea and Panama were high on the agenda for Senators.

“The FTA’s are a priority,” Kirk told the lawmakers. “We have not given up on any of those.” (Kirk’s statement.)

The ambassador was challenged by both Chairman Baucus and Ranking Member Grassley, who warned him that the United States will lose out to our competitors in Europe and other nations if we don’t advance the pending FTAs with Colombia, Korea and Panama. The goal of doubling exports in five years will be strongly aided by passing these pending FTAs, Kirk heard more than once.

As far as that competition from Europe and other countries, the European Union is certainly not letting any grass grow under its feet. On Tuesday, the EU announced the start of FTA negotiations with Vietnam. On Wednesday, the EU announced the start of FTA negotiations with Singapore. And, of course, the EU is looking to enact its FTA with Korea in the next few months.

The U.S. has an FTA with Singapore, and Vietnam would be included in the Obama Administration’s proposed Trans-Pacific Partnership (TPP) FTA –- the first round of negotiations for the TPP begins in mid-March.

This news all comes on the heels of the announcement by the EU Tuesday that it has concluded its FTA negotiations with Colombia and Peru, and is looking to a May 2010 signing with entry into force by 2012.

Colombia is also nearly finished negotiating an FTA with Canada.

Canada, by the way, is negotiating an FTA with the European Union. And, of course, Canada and Korea are negotiating an FTA too.

There seems to be a trend here: Strong manufacturing countries, whose industries compete with manufacturing in America for exports to these markets, are all fiercely pursuing trade deals with the same group of nations. If past trends continue, once they conclude negotiations, Europe and Canada will move quickly to enact these agreements. So will Peru, Colombia, and Korea.

The thing about an FTA is, it gives your exports a huge competitive advantage over those from nations that haven’t signed one. But you need to pass and enact the FTA to receive those benefits of lowered tariff barriers and other forms of enhanced market access. And, if you postpone signing an FTA while your competitors move forward in opening new markets – when you finally get around to finishing, you will find your competitors (from Europe, from Canada, from Korea) have already used that time to strengthen and solidify their competitive advantages. And that can be a problem when you’re trying to double your exports.

The Senate Finance Committee understands the importance of trade – both Chairman Baucus and Ranking Member Grassley know how important FTAs are to increasing our export competitiveness around the world, and they were eloquent on that subject with Ambassador Kirk –- who is also very aware of the benefits trade brings and was equally as eloquent at the hearing today. The United States has been in a holding pattern on passing FTAs – but our competitors, particularly the European Union -– are not. They are moving forward, and they are going to reap the benefits.

Doug Goudie is director, international trade policy, for the National Association of Manufacturers.

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