President Obama met with members of the House Trade Working Group at the White House yesterday to hear their concerns the U.S.-Korea Free Trade Agreement (FTA). Meanwhile, promising developments have occurred with the other two nations with which the United States has pending free trade agreements – Panama and Colombia.
Panama and the United States came to agreement on a Tax Information Exchange Agreement (TIEA), which is one of the outstanding issues that the Administration has indicated needed to be concluded before it would consider moving the U.S.-Panama FTA. Anything that can remove an impediment to a part of the stalled trade agenda is a very good thing.
Of course, over the last few months the business community’s focus has been squarely on the Administration’s discussions aimed at getting a final deal on the U.S.-Korea FTA. If those discussions over resolving the disputes over beef and autos are successful — and it is a shame they weren’t finalized in Seoul last week – that trade agreement could be sent to Congress early in 2011. U.S. manufacturing exports to Korea are in the neighborhood of $25-30 billion annually over the last few years, and Korea has a manufacturing import sector worth $250 billion annually – so it’s a big deal.
During this same period, the Administration has been working closely with Panama, and with a successful TIEA, we could conceivably see (and we HOPE to see) movement on that trade agreement as well in 2011. Panama is engaged in the largest civil works project on earth right now (expanding the Panama Canal), and it would be fantastic for U.S. companies to be exporting duty-free the equipment, materials, engineering services and everything else this $5 billion project needs as soon as possible.
This leaves us with our last pending trade agreement – Colombia — and as the country’s new Ambassador Gabriel Silva recently told reporters, Colombia has been removed from the International Labor Organization’s watch list because of widespread improvements his government has made in controlling violence against labor activists. This goes to the heart of what the Administration and some Congressional Democrats have been asking for; Colombia is to be commended for its long commitment, under both previous President Uribe and current President Santos, in pushing for improvements.
Even as Colombia was achieving these goals, the country has also been concluding trade agreements that give our trade competitors an advantage over the United States. Ambassador Silva noted that U.S. agricultural exports had dropped 48 percent to Colombia in 2008. He added, “We cannot keep waiting. Meanwhile, we have signed free trade pacts with Japan, South Korea, Mexico and Mercosur.”
These three pending trade agreements represent the best hope for jump-starting the National Export Initiative’s goal of doubling U.S. exports by 2014. The three agreements are worth as much as $15 billion in new U.S. exports, according to the U.S. International Trade Commission, and manufactured goods stand to be the lion’s share of those exports.
The pending FTAs with Colombia, Panama and Korea are the key to reinvigorating a national discussion on why free trade agreements are good for manufacturing, good for the American economy and good for American workers. Korea will have the greatest economic impact for U.S. manufacturers and exporters, but we’d prefer to look at the benefits of all three combined at the same time – more bang for the buck.
The United States enjoys a trade surplus in manufactured goods with our Free Trade Agreement partners, and that will be true after all three are passed as well. All three agreements should be able to move by the time Americans are thinking about our 2011 summer vacations.