We happened to catch two excellent speeches in Congress this week on the importance of Free Trade Agreements.
Rep. Kevin Brady (R-TX) spoke Wednesday during the House debate on H.R. 1875, to establish an Emergency Trade Deficit Commission. The full debate started on page H6813 of The Congressional Record. Brady, who managed the Republican side of the debate, spoke beginning on page H6188, noting that the day marked the fifth anniversary of House passage of the U.S.-Central American Free Trade Agreement, or CAFTA.
Trade agreements … give us a chance not one-way trade in, but two-way trade where we have a level playing field. The world has changed. It’s not enough to simply buy American. We have to sell American. We have to sell our products and goods and services throughout this world. In fact, over 80 percent of our trade deficit today is with countries that are not trade agreement partners, that are not level playing fields for the United States. That’s why we push hard for those agreements.
For example, 5 years ago the United States had a $1.2 billion trade deficit with Central America. Last year, the United States had turned that around, because of the agreement, to a $1.2 billion trade surplus, and we’re on track to surpass that surplus again this year. Last year, the United States had a trade surplus in manufactured goods with our Central American partners of almost $2 billion. We’re on track again this year.
Nor is CAFTA the only example of how trade agreements can improve the U.S. trade balance. This week also marks the eighth anniversary of the final House vote on the Trade Act of 2002, under which we have resoundingly successful trade agreements with 13 countries now in force. Last year, the United States had a trade surplus of over $25 billion with these 13 countries. And so far this year, we have a surplus again.
Looking at just trade in manufactured goods reveals that these agreements were even better for American manufacturing workers. Last year, the United States had a trade surplus of over $29 billion in manufactured products with these countries that we have free trade agreements. And again, we have this year a surplus already of nearly $16 billion. Without question, these trade agreements have reduced U.S. trade deficits and increased U.S. trade surpluses.
Rep. Geoff Davis (R-KY) also spoke on the floor, emphasizing the importance of trade to the manufacturing sector: “In my home State of Kentucky, nearly 50,000 manufacturing jobs are dependent on exports. The simple fact is that 95 percent of the world’s consumers live outside the United States, and the fastest growing markets are outside our borders. So success in those markets is critical to growing our manufacturing sector and creating good paying jobs.”
In the Senate, Sen. Chris Dodd spoke on Thursday, making a strong case for enacting the U.S. Free Trade Agreements with Colombia and Panama. He argued that the agreements had value for both foreign policy and U.S. domestic economic reasons, and concluded:
The Panama and Colombia Free Trade Agreements were established over 2 years ago. They have been the subject of intense scrutiny and public debate. They have benefitted by the input of the Congress, through the historic May 10 agreement, which I described earlier, that saw the inclusion of binding, enforceable, and meaningful labor, public health, and environmental standards. These discussions have allowed the Congress and the American people to critically examine the importance of these trade agreements and our partnerships with these key allies.
I urge support of these trade agreements before us not in spite of our current economic situation but because of it. This recession demands bold moves and innovation. It requires us to strengthen our key economic partnerships and to expand into new markets where we can. Now is not the time to close our borders to nations with whom we already have strong ties. History shows that erecting barriers to trade has the potential for deepening the global recession. Conversely, these agreements mean more economic opportunities for American workers and our families.
It is time for us to change the way we relate to the world, particularly in Latin America. For too long we have used our differences in this region with our allies as an excuse not to act, as a reason to disengage. These agreements offer us a chance to refresh that paradigm, to make the United States a proactive partner in fostering economic opportunity by bringing us closer together and promoting our shared values.
It is time, in my view, for the United States of America to lead a global economic recovery. A small but important step down that road is the passage of the Panamanian and Colombian Free Trade Agreements, and I urge my colleagues, both Democrats and Republicans, to support these agreements. I hope we can do so before we adjourn this session of Congress.
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