Tag: Panama

Senate Holds Panama FTA Hearing

The Senate Finance Committee held a hearing on the U.S.-Panama Free Trade Agreement this morning.  Watch the hearing here.

The Committee heard testimony from NAM member Jason Speer, vice president and general manager of Quality Float Works.  Jason had just returned from Panama, so he was able to offer a particularly informed perspective about what the trade agreement would mean for manufacturers.

Jason also spoke with the NAM while he was in Washington:

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The U.S.-Panama Free Trade Agreement: Opportunity Awaits

Panama is already a great market for U.S. manufacturers and exports, and the expansion of the Panama Canal, the huge subway project in Panama City, and the development of the world’s fifth largest copper mine represent even more opportunity, the CEO of Caterpillar testified Wednesday.

Taking advantage will require President Obama to submit the U.S.-Panama Free Trade Agreement to Congress for its enactment.

Doug Oberhelman, Caterpillar’s CEO and vice chairman of the National Association of Manufacturers, testified Wednesday at a House Ways and Means Trade Subcommittee hearing on the benefits of the U.S.-Panama Free Trade Agreement. (Prepared statement)

Manufactured goods and agriculture consistently report trade surpluses, Oberhelman reminded the committee. (See graphic below.) The growth of U.S. exports has been especially strong in the Latin American countries with which the United States has free trade agreements. Lowering Panama’s tariffs against U.S. goods would help expand market share for American companies. Oberhelman:

U.S. export success in Panama comes despite a fundamental imbalance in the proverbial playing field. The United States unilaterally opened its market to Panama and its neighbors through the Caribbean Basin Initiative in 1983 and expanded that access through successive acts with the support of strong bipartisan majorities in Congress. Currently, under the Caribbean Basin Trade Partnership Act (CBTPA), fully 96% of all imports from Panama already enter the U.S. market duty-free. By contrast, Panama’s average applied duty on imports of manufactured goods is 7.1%, and agricultural products face even higher tariffs. In other words, Panama enjoys virtually free access to our marketplace, while U.S. products continue to be taxed at steep rates when entering Panama. (continue reading…)

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Manufacturers Testifying on Free Trade Agreements

The House Ways & Means Committee has posted the witness list for its hearing 10 a.m., Tuesday, “On the Pending Free Trade Agreements with Colombia, Panama and South Korea and the Creation of U.S. Jobs. ” NAM Board Member Roy Paulson leads things off.

  • Roy Paulson, President, Paulson Manufacturing Corporation, on behalf of the National Association of Manufacturers
  • Bob Stallman, President, American Farm Bureau Federation
  • Michael L. Ducker, Chief Operating Officer and President, International, FedEx Express
  • William J. Toppeta, President, International, MetLife
  • Stephen E. Biegun, Corporate Officer and Vice President of International Governmental Affairs, Ford Motor Company

Paulson Manufacturing is based in Temecula, Calif. From its website:

Since 1947 we have been providing protective equipment for various industries worldwide. From industrial to fire and rescue, tactical and ballistic verification testing, we have the right products for you. Specializing in face protection, our family owned and operated business consistently delivers quality and innovation to each and every customer.

We’ll post all the testimony when it becomes available on Tuesday.

The hearing is perfectly timed. President Obama delivers his State of the Union address Tuesday evening, and export-driven job growth is expected to be a theme. The president can lend substance to the rhetoric by announcing his intention to submit not just the Korea, but also the pending FTAs with Colombia and Panama to Congress for enactment.

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Manufacturing in State of the State Addresses: Georgia

Georgia Gov. Nathan Deal, a Republican, delivered his first State of the State address on Thursday. Like other governors who have already delivered their speeches to legislatures, Deal made no specific reference to “manufacturing” or “industry.” The budget crises affecting many states have pushed manufacturing qua manufacturing off the agenda.

Still, Deal made comments of keen interest to manufacturers, most directly in his discussion of infrastructure investment as necessary for economic growth.

There is no more important public works project for the competitiveness of our entire region than the Savannah harbor deepening project. When the enlarged Panama Canal comes online in 2014, we will be ready to receive the Post-Panamax ships heading north. These larger ships improve cargo rates for shippers and receiving these ships in Savannah will have a ripple effect throughout the state.

Also, as we prepare to deepen the Savannah Harbor, we must work to ensure that we have last mile connectivity with the Port and statewide East-West connectivity to guarantee the efficient movement of people and goods throughout our state.

Infrastructure is key to economic competitiveness and Georgia’s transportation network has always been our strength. Georgia is already home to the most capable airport in the world, an extensive network of regional airports, the fastest growing ports in the nation and two Class One rail lines. 99 percent of Georgians live within 20 miles of a four-lane road.

Deal, a former Congressman, also discussed the regional and commuter needs in the context of infrastructure.

We must think innovatively to find alternative funding sources. In particular, because Georgia is an attractive destination for investment with a strong balance sheet and good demographics, public-private partnerships hold incredible potential.

A governor who spends a good part of his early Administration’s most important speech discussing a major port, the Panama Canal, and public-private partnership is definitely attentive to conditions that encourage investment in industry, even if he doesn’t mention the word “manufacturing.”

More coverage of governors’ State of the State speeches here.

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Trade Metaphor: Even Empty Stadiums Have Level Playing Fields

Our friend Stephen Lamar, executive vice president at the American Apparel and Footwear Association (an NAM-member association), passes on this telling photo and cogent critique of Congressional inaction on pending Free Trade Agreements.  It’s so good we’d thought we share it:

As the world’s attention stays riveted on South Africa to watch the World Cup and as we in your Nation’s Capitol look forward to Nationals pitching phenom Stephen Strasburg’s next start, our minds inevitably wander into sports.

I was recently shown this picture of the stadium and was told that this is a good metaphor for U.S. trade policy because it shows a level playing field. 

Perhaps it is a good metaphor for U.S. trade policy but for a lot more reasons.

 True, it is a level playing field, but…

….nobody is in the stands

….nobody is on the field (certainly the American team is missing)

….no referees are present (although recent US soccer history suggests this may not always be such a bad thing)

….it is impossible to score (there aren’t any goal posts – maybe, as some have argued, because they have been moved so much)

….the lines are so faint we aren’t even sure which game we are playing (although I suspect it may have recently been used for soccer).

Perhaps this is overly harsh.  But, while we have seen some encouraging signs on trade recently – the energy driving the National Export Initiative (NEI) is reassuring, Congress approved new Haiti preferences, and the TPP process seems fully underway – there are too many other flags on the field (although absent from the picture I know) that continue to raise concern.  The Misc Tariff Bill process has dragged on far too long with resolution uncertain. 

Absent a Hail Mary pass in a lame duck session this year, this Congress will hold the distinction as being the first one to not approve a free trade agreement this century, even though there are three perfectly good ones (Colombia, Korea, and Panama)  sitting on the benches (again, no benches, I know.  Judging by the speed with which Canada and the EU, among others, are negotiating, completing, and approving trade agreements with those same countries, there seems to be a lot of activity in other stadiums.  

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Canada and Panama Sign Trade Pact, Edging Out U.S.

Whatever concerns over Panama’s tax openness some in the U.S. Congress and Obama Administration might have, it doesn’t seem to bother our friends to the North very much: Canada and Panama signed their Free Trade Agreement (FTA) this morning. (You can read the text of the agreement and see the statement of Canada’s Minister of Foreign Affairs and Trade.)

Canada exports far less to Panama than the United States: $49 million in recession-hit 2009 and $75 million in 2008, versus our exports of $2.2 billion in 2009 and $2.6 billion in 2008. However, looking at very broad sectors of Panama’s industrial imports, the United States and Canada compete head-to-head in several export sectors that are in the top 10 by value for both nations, including paper/paperboard, machinery/reactors/boilers, electrical machinery, and food waste (not sure exactly what fits into that category, but we shipped $69 million worth to Panama last year).

But — Canada’s exports will now enjoy duty-free access to Panama, whereas our products continue to face duties averaging 14 percent. So, our neighbors in Ottawa and Toronto, Vancouver and Montreal, Medicine Hat and Saskatoon will now have a competitive advantage against American manufactured goods and agricultural products.

It’s probably also a good time to point out that Panama has replaced Chile as the Latin American country with the best business climate, according to the fifth annual Latin Business Index from Latin Business Chronicle.

When we look at the FTAs that the European Union and Canada are signing and negotiating, it looks like a flight pattern at a busy airport at rush hour. Three years after the May 10th Agreement was signed to move four pending FTAs with Colombia, Korea, Panama and Peru, we are still waiting to pass three of them. Meanwhile, Canada has FTAs moving with Panama and Colombia, and is negotiating with the EU and Korea. The European Union has FTAs nearly complete with Colombia, CAFTA (including Panama), and Korea, and is negotiating with India and MERCOSUR.

As far as Canada-Panama, we may not need to worry too much about Canadian manufacturing pushing aside U.S. products (in the near-term, anyway). But we should be wide awake with worry about the EU, Canada, Korea and others signing FTAs at such a rapid clip while we are quietly sitting on our hands. This is the first of many FTA announcements we’ll be seeing from some of our major competitors around the world. Many of them will be with existing U.S. FTA partners, or with the three pending FTAs we haven’t yet passed. Each one of these FTA signings means a loss of American manufacturing competitiveness, and with it the promise of new jobs, new growth and new opportunities.

Doug Goudie is NAM director for trade policy.

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So Stand Firm Against the Winds: Submit the FTAs to Congress

From Secretary of State Hillary Clinton’s remarks Wednesday at the 40th Washington Conference on the Americas:

One, I see my friends from Colombia and Panama, and I hate seeing them, I have to be honest. (Laughter.) We are, as President Obama said, committed in the State of the Union to our free trade agreements with both countries, but we are also facing very difficult political challenges. But I am absolutely here to reiterate that commitment. Both Panama and Colombia have worked very hard to deal with some of the questions that were raised by this Administration and certainly by our Congress, and I think that we are going to pursue this. I can’t predict the outcome, but it is something that the President and I in particular feel strongly about. You’ll hear from U.S. Trade Representative Ron Kirk later in the program.

But our commitment to trade is one that we feel strongly about. We just have to deal with the political winds and we need more help from the private sector. We need more strong advocacy on behalf of the importance of trade and why it is good for the United States and American workers. My friends from Mexico, who will be here in great numbers next week, know that we have some challenges on that front as well. I don’t want to ignore that because we have some outstanding trade issues. But again, we are trying to work through those and bring those to resolution, and we’re very excited about President Calderon’s visit.

To win the lottery, you have to first buy a ticket. To lead, you have to stand firm against the political winds. And to enact a free trade agreement, you have to submit it to Congress. The votes are there to pass the Colombia and Peru FTAs.

The Secretary of State also says, “We need more strong advocacy on behalf of the importance of trade and why it is good for the United States and American workers.” From whom? Advocates for the free trade agreements are vocal, fervent, full of facts and good arguments. Shopfloor.org has published 144 separate posts on the Colombia and Panama FTAs. Some of those arguments were good!

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Senators Urge Action on FTA

On May 10, Senators John Kerry (D-MA) and Richard Lugar (R-IN), chairman and ranking member of the Senate Committee on Foreign Relations respectively, urged the Administration in a letter to move forward on the U.S.-Korea Free Trade Agreement.

The Senators highlighted the great missed opportunity inaction on this FTA represents and pointed out that our competitors are quick to take advantage.

Through inaction, the United States will cede Korea’s vast markets to other countries, a luxury that we cannot afford.  In 2004, China displaced the United States as Korea’s number one trading partner.  Recently, the European Union and India signed agreements with South Korea to lower trade barriers.  As these countries effectively gain preferential access compared to American products, the United States risks missing significant opportunities, while other countries’ economies grow and create jobs from trade expansion.

Shopfloor made this exact point yesterday and has long called for swift action on this, as well as the Colombia and Panama FTAs, that have languished in Congress for more than a year.

In his statement, Senator Kerry added, “This step could be a significant part of the President’s goal of doubling U.S. exports over the next five years to create well-paying American jobs.”

That won’t happen unless we open foreign markets to our goods and services.

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Majority Leader Hoyer: Pass FTAs with Colombia, Panama

From Reuters, reporting on remarks by House Majority Leader Steny Hoyer after his speech today at the National Press Club. “We ought to pass them,” he said of the still-pending Free Trade Agreements with Colombia and Panama. The deal with South Korea needs more work.

“Basically, however, I believe that America can compete with the rest of the world if we have a level and fair trading field. So I’m one of those that believes that trade is helpful and creates jobs over the long run.”

Yes, Hoyer said pretty much the same thing when he spoke to the National Association of Manufacturers last September, but he was right then and he’s right now.

Reporters asked NAM President John Engler about trade today on a conference call about the Milken Institute study, “Jobs for America.” Engler said any discussion about jobs in the President’s State of the Union should embrace trade expansion: “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.”

More on Hoyer’s remarks, with a strangely inclusive lead, from AFP.

Earlier today, Bloomberg moved a larger piece about the Obama Administration’s pallid trade agenda, reporting the disappointment of major exporters like Caterpillar. Also, the following seems like a fair assessment:

[Obama’s] trade agenda remains modest, said William Reinsch, president of the Washington-based National Foreign Trade Council, which represents exporters such as Boeing Co.

There’s a split in the administration between economic advisers who support more trade pacts and political operatives who say doing so would enrage Democratic lawmakers and their union supporters, Reinsch said in an interview.

“So far the political people are winning,” he said.

Yeah. Jobs or politics, politics or jobs.

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Steny Hoyer Promotes Trade Pacts in Talk with Manufacturers

House Majority Leader Steny Hoyer spoke this a.m. to the National Association of Manufacturers, the NAM’s Public Affairs Steering Committee meeting today at the J.W. Marriott.

His remarks, about 28 minutes worth, were well received: He gave a quick economic overview emphasizing the public’s unease, lauded the President’s speech last night on health care and urged the NAM to work toward health care reform.

The two passages we found notable were his strong endorsement of action on the pending free-trade agreements with Colombia and Panama (Korea’s problematic, he said), and his stressing the need to bring the deficits under control. On trade:

I am very hopeful and I have urged publically some of my friends in my party, in the caucus and around who are somewhat concerned, we ought to pass Colombia and Panama.

Korea is more problematic, mainly because of automobiles and beef. And with beef, you saw the premier tried to solve, the prime minister, tried to solve the beef problem had a very big reaction in his country.

And ….

I’ve told my friends who are not in that place, I said, look, if a manufacturer can make more profit for stockholders, which is their obligation to do, maximize their profits who invested their capital in growing a business, then they’re going to do so.

Just as the shoe manufacturers moved to Massachusetts down to Alabama or South Carolina, or the textile manufacturers moved, people move to where they can best advantage their businesses. You can’t lock people in.

What we can do, however, is to provide for mechanism whereby this international community, this “flat world” that Tom Friedman talks about, we have as level of playing field as we can get. And that means opening up trade. And so I’m a big proponent of Panama and Colombia.

And …

I believe that once we get health care one way or another, I think we’ll going to pass a health care bill, I think we will in fact move on to address trade.

Here’s an .mp3 file of his trade remarks.

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