President Obama on Wednesday spoke to the Business Roundtable, the trade association that represents the largest corporations in the United States (and with which the NAM shares many members). In his remarks, the President expressed support for the pending free trade agreements with Panama, Colombia and South Korea.

Now, I know that trade policy has been one of those longstanding divides between business and labor, between Democrats and Republicans. To those who would reflexively support every and any trade deal, I would say that our competitors have to play fair and our agreements have to be enforced. We can’t simply cede more jobs or markets to unfair trade practices. At the same time, to those who would reflexively oppose every trade agreement, they need to know that if America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. In other countries, whether China or Germany or Brazil, they’ve been able to align the interests of business, workers, and government around trade agreements that open up new markets for them and create new jobs for them. We must do the same. And I’m committed to making that happen.

That’s why we launched the Trans-Pacific Partnership to strengthen our trade relations with Asia, the fastest-growing market in the world. That’s why we will work to resolve outstanding issues so that we can move forward on trade agreements with key partners like South Korea and Panama and Colombia. And that’s why we will try to conclude a Doha trade agreement –- not just any agreement, but one that creates real access to key global markets.

Reuters reported on the speech and reaction, “Obama trade talk cheers business groups,” citing one of the NAM’s specialists in the area:

Doug Goudie, director of international trade policy with the National Association of Manufacturers, said he took seriously the Obama administration’s new focus on trade and much appreciated the goal of doubling exports.

“Moving forward on those three FTAS as soon as possible is going to be the best way to jumpstart the rest of their plan,” such as increasing the number of small- and medium-sized U.S. companies that export, he said.

The Business Roundtable issued a statement summarizing the meeting, with President John Castellani also highlighting trade issues:

We agreed with the President that the United States cannot sit on the sidelines while our competitors negotiate trade agreements that benefit their companies and workers over ours; we discussed the need for Congress to pass the pending free trade agreements as a first step toward the enhanced international trade and investment that is essential to growing the U.S. economy and creating more and better-paying jobs.

The next step for the President is to stop talking about “moving forward” on the FTAs and instead say, “Congress should now enact the pending Free Trade Agreements.”

From the President’s State of the Union:

[We] need to export more of our goods. (Applause.) Because the more products we make and sell to other countries, the more jobs we support right here in America. (Applause.) So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. (Applause.) To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security. (Applause.)

That’s a welcome target to achieve export-driven growth, and it’s notable that the President regards the export controls issue important enough to warrant a mention.

Correctly so, the NAM believes. The new Milken Institute study, “Jobs for America,” concludes “modernizing U.S. export controls could increase exports in high-value areas. By 2019, these policy adjustments could enhance real GDP by $64.2 billion (0.4 percent), create 160,000 manufacturing jobs, and heighten total employment by 340,000.” The in-depth analysis is here.

The President also reaffirmed the Administration’s oft-stated belief in the value of trade agreements.

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. (Applause.) But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. (Applause.) And that’s why we’ll continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia. (Applause.)

But let’s do more than “strengthen” — let’s ENACT. The President would have helped achieve the goal he had just set by calling on Congress to enact the U.S.-Colombia Free Trade Agreement, the U.S.-Panama Free Trade Agreement, and the U.S.-Korea Free Trade Agreement.

As NAM President John Engler said in a press briefing Monday, “”We believe we absolutely have the votes for the Panama and Colombia agreements.” And… “We think if they’re serious on the jobs front, they have to look at trade. We’ve got a lot of companies that send a big amount of their production abroad for sale.”

House Republican leaders on Thursday sent a letter to President Obama expressing their agreement with his statements of support for expanding U.S. exports to create jobs. Excerpt:

Bipartisan support for implementing trade agreements with Colombia, Panama and South Korea already exists. In the interest of supporting American job creation, we ask that you jump-start the implementation process through your leadership, particularly by promoting all of these pending trade agreements when you speak to the nation in your State of the Union address. We offer our full support for your efforts and look forward to an opportunity to work steadfastly with you to implement each of these agreements as close to the start of next year as possible.

John Engler, president of the National Association of Manufacturers, has an op-ed marking the third anniversary of the signing of the U.S.-Colombia Free Trade Agreement. From The Bradenton Herald, “U.S.-Colombia free trade pact will boost employment, if passed“:

Citing observers and trade advocates, McClatchy Newspapers asks and answers a question, “What’s Obama’s trade policy? So far, there isn’t much of one.” The NAM’s view:

“There is no question that they (the Obama team) have looked at the economic circumstances in which the United States finds itself, and restoring any good degree of wealth means rapid growth in exports, and one way to do that is opening up more markets,” said Frank Vargo, vice president of international affairs for National Association of Manufacturers.

Playing defense on trade and merely “engaging” Asian nations, however, won’t provide much short-term spark to the still-struggling global economy.

Yet …

What bothers the National Association of Manufacturers, however, is the lack of any public push by Obama to score a palpable trade success, such as wrapping up one the pending deals.

“The main difficulty with the administration’s trade policy has been pushing it out into the future,” Vargo said. “It’s just the execution_ particularly in terms of the pending free-trade agreements — that is the problem.”

McClatchy manages a good selection of perspectives in its piece. Investor’s Business Daily just has one perspective in its editorial today on the Obama Administration and the U.S.-Korean trade agreement, expressed with the paper’s usual sharpness. The President expresses support for the trade deal when visiting Korea, but then finds vague reasons inaction. “Double talk on trade,” says IBD.

Commerce Secretary Locke is a stalwart supporter of expanding trade, so these comments are especially disappointing. From Associated Press, “US commerce secretary: Trade pacts must wait“:

SINGAPORE (AP) — Trade agreements with South Korea, Colombia and Panama won’t be put before Congress until it grapples first with President Barack Obama’s pressing legislative goals, the U.S. commerce secretary said Friday.

Commerce Secretary Gary Locke said Obama has an ambitious high-priority legislative agenda focusing on health care, financial regulation and alternative energy.

“Trade agreements are going to have to wait,” he said at a luncheon hosted by the American Chamber of Commerce in Singapore. “Right now, the administration is focused on a very aggressive and very tight legislative agenda.”

This is a bad message in many ways, and its timing is terrible.

Postponing action invites permanent inaction on the trade agreements. President Obama’s legislative agenda is never going to be finished. That’s the nature of legislative agendas. If the President succeeds in winning Congressional approval of health care, financial regulation and cap-and-trade legislation, the resulting higher taxes, increased regulations and expanded power of the federal government will produce so many unintended consequences that legislative fixes will be demanded. At the same time, changing conditions in Iraq and Afghanistan will continue to require an executive branch agenda for Congress.

Delays are also deadly. In his remarks to the Japan Society of Indiana on Wednesday, NAM President John Engler noted:

The United States and Peru signed a Free Trade Agreement in December 2007. That’s the last bilateral trade agreement the U.S. has actually put into effect.

Since then, the EU, Canada, Korea and Japan have jointly completed or are negotiating 31 separate Free Trade Agreements that cover 80 countries.

The United States already standing on the sidelines as other countries create more advantageous trade relationships with one another. Now the Administration would have us head back to the locker room.

The message also undercuts the President as he prepares to meet major trade partners and competitors in Japan, China and Korea. How can he pressure the Chinese to correct the trade imbalance (see yesterday’s post) when the Administration is at the same time saying trade is not one of its priorities? Most observers say the votes are there to enact at least the Colombia and Panama FTAs, and inaction thus appears guided by other domestic political considerations, which is to say, playing up to organized labor. It’s difficult for the President to tell China’s leaders to pay less attention to its own domestic politics on trade when it’s domestic politics appearing to determine the Administration’s trade agenda.

Finally, jobs. President Obama announced plans for a December “jobs summit” this week and there’s talk of another stimulus bill to boost jobs creation.

But delaying action on these pending free trade agreements takes one of your game-changing jobs-creating players off the field. In his Indianapolis remarks, the NAM’s Engler reported key facts: “Last year, Indiana exported $27 billion of goods. About 90 percent of those exports were manufactured goods. Nearly one in every five Indiana factory workers owes his or her job to exports.”

That’s a jobs agenda right there — exporting more. Get back in the game, Mr. President, and make the free trade agreements a priority.

From The Hill, a story we hadn’t seen elsewhere, “Obama mulls trade partner change-up“:

The Obama administration is locked in an internal debate over whether to negotiate a new Asian-Pacific free trade partnership.

The Obama administration is locked in an internal debate over whether to negotiate a new Asian-Pacific free trade partnership.

If the White House decides to go forward, it would amount to the first new free trade arrangment launched by President Barack Obama in a part of the world leading the global recovery.

At issue is a proposed Trans-Pacific Partnership Agreement (TPP), joining the following countries in a free-trade group: United States, Chile, Singapore, Australia, Peru, Brunei and New Zealand. There are existing bilateral agreements with the first four, so Brunei and New Zealand would be new partners.

Fine. That’s a good idea for jobs creations and export-driven economic growth. But …

The National Association of Manufacturers supports the TPP, but also wants the pending trade deals to move forward, said Doug Goudie, the group’s director of international trade policy. “I think it’s a great idea. Asia is where the significant growth will be,” he said.

Those agreements being already-negotiated pacts with Colombia, Panama and South Korea.

We do welcome the discussions, really. But while the Administration and Congress talk, other countries act. Here’s the latest:

• Bloomberg, “Malaysia, New Zealand Sign Free Trade Agreement to Bolster Ties“
• The Canadian Press, “Canada pushes for lower EU subsidies at trade talks“

Everyone in the Obama Administration and Congress agrees that increased exports are an integral and important component of our economic recovery. It’s a stock phrase in U.S. Trade Representative Ron Kirk’s speeches.  President Obama has cited the importance of increasing exports many times. His Proclamation on World Trade Week says it all: “In difficult economic times, it is even more important for American industry to take advantage of every opportunity for export-driven growth. That is why I will work to open more markets to U.S. exports. . .”

Instead of just talking about increasing exports, other industrial nations are actually taking advantage of these opportunities. The latest example — one that should scare every U.S. manufacturer that competes with the 27 nations that make up the European Union (EU) — is the EU-Korea Free Trade Agreement (FTA).

The European Union and South Korea held a ceremony today to initial their bilateral FTA. The EU is calling the agreement “the most important ever negotiated between the EU and a third country,” and is estimating the value of the agreement is worth EUR 19 billion ($28.2 billion) in new business for EU exporters. The initialing of the agreement paves the way for approval by the Member States early in 2010 and entry into force midway in 2010. When this enters into force, Korea will drop to zero virtually every tariff it has, and will substantially reduce a raft of non-tariff barriers that have impeded export of some products for decades.

Didn’t the United States and South Korea do the same thing a while back? Yes, indeed. Two years ago, in fact. The United States signed a free trade agreement with South Korea in a lovely ceremony on June 30, 2007, up in the Russell Senate Caucus Room. Champagne was served afterward, and U.S. and Korean negotiators and the business community toasted an agreement that, outside NAFTA, was hailed as the most important FTA negotiated between the U.S. and another nation in a decade.

What is the status of the U.S.-Korea FTA? It has yet to be sent to Congress for approval.

CanWest News Service, this morning, “Canada signs free-trade agreement with Panama“:

PANAMA CITY — Prime Minister Stephen Harper will sign a free-trade agreement with Panama on Tuesday morning, giving Canadian business greater access to the small but fast-growing Central American economy.

 

Once the deal is ratified, Panama will immediately eliminate tariffs on more than 90 per cent of its current imports from Canada. The remaining tariffs will fall within a decade.

And from the Aug. 5 letter to President Obama from major business groups, including the National Association of Manufacturers, referring to the pending Colombia, Korea, and Panama free trade agreements:

In particular, we urge you to pursue major market-opening agreements with the Asia-Pacific and beyond, as well as more focused initiatives on an industry and country-specific basis, including the passage of the three pending trade agreements.  Such initiatives will help enable U.S. workers and industries to gain access to the 95 percent of the world’s consumers, who command 80 percent of the world’s purchasing power and who live outside U.S. borders. …

Failure to lead will be costly to the United States.  Our manufacturers, farmers and service providers will continue to face significant barriers in foreign markets and will also be disadvantaged vis-à-vis many of their foreign competitors whose governments are negotiating agreements to ensure that their industries and workers have new market-opening opportunities.

From President Obama’s joint news conference Monday with Colombia’s president, Alvaro Uribe. President Obama:

We discussed, most prominently, the interests of both countries in moving forward on a free trade agreement.  This is something that has been discussed for quite some time.  I have instructed Ambassador Kirk, our United States Trade Representative, to begin working closely with President Uribe’s team on how we can proceed on a free trade agreement.  There are obvious difficulties involved in the process and there remains work to do, but I’m confident that ultimately we can strike a deal that is good for the people of Colombia and good for the people of the United States.

Indeed it IS something that has been discussed for quite some time. At some point, soon, the President will need to say, “I call on Congress to enact the U.S.-Colombia Free Trade Agreement,” or the discussions will go on ad infinitum.

Delay might be a defensible strategy if the goal is to satisfy U.S. political constituencies like organized labor, but it does nothing for the U.S. exports and the economy. In the meantime, other countries like Canada will gain market share in Colombia at U.S. expense.