Tag: U.S.-Colombia FTA

World Not Waiting for U.S. on Trade Agreements

It is no secret other countries are racing ahead with trade agreements while the U.S. stands idly by. There are 120 free trade agreements being negotiated around the world, and the U.S. is a party to just one.

As for pending trade pacts, the U.S. free trade agreements with Panama, Colombia and South Korea have languished for four years.  (But see this post from Monday for a dose of optimism.)

Those countries aren’t waiting for the U.S.  The Wall Street Journal reports today that Colombia is seeking to increase its trade ties with China.

Colombian lawmakers passed legislation they hope will open the floodgates of trade with China, where the government plans two high-level trade missions over the next three months, as a long-delayed U.S. trade deal with the South American nation stalls in Congress.

Colombia Trade Minister Sergio Díaz-Granados said Tuesday’s passage of the “Chinese Trade Promotion and Protection” bill—which affords China certain legal guarantees on its investments in Colombia—could also propel talks with China to build a railway that would link Colombia’s Caribbean and Pacific coasts, and would serve as an alternative to the Panama Canal.

Trade officials in Bogotá expressed frustration with the slow pace of progress in Washington, which they say contrasts with Chinese eagerness to invest in Colombia, Washington’s closest ally in South America.

In an interview, Mr. Díaz-Granados said he remained hopeful a free-trade pact with the U.S. would be passed before year’s end, but that Colombia can no longer “sit with its arms crossed, waiting.”

“We’ve been talking about a U.S.-Colombia free trade deal for 20 years, and it’s certainly the trade deal we want more than any other,” Mr. Díaz-Granados said. “But in the meantime, we have to continue working in other directions. Our business leaders need to pursue other markets and diversify.”

The U.S. has been waiting for too long.  Every day that lawmakers sit on the trade agreements is a day the country is missing out on opportunities for growth and jobs.

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Choosing the Right Tools for Economic Growth

Nina Easton, senior editor-at-large of Fortune, looks at the Administration’s efforts to revive the economy.

Talk to business leaders — the people who actually hire people — and you don’t hear worries that Washington is running out of tools. What you hear, pretty consistently, is that this White House stubbornly insists on reaching for the same wrong toolbox.

One policy from the right toolbox, she writes, is free trade.  Members of both parties support free trade policies, but that bipartisan accord has yet to break the stalemate on three pending trade agreements: Korea, Colombia and Panama.

“Overseas markets are ripe for American products,” says Jay Timmons, CEO of the National Association of Manufacturers, who likes to repeat the mantra that 95% of customers are abroad.

The administration has given lip service to the importance of this fact — the President says he wants to double exports. But the only three free trade agreements now before Congress — with South Korea, Colombia, and Panama — have yet to move forward, trapped in negotiations over spending more money on trade adjustment assistance. According to the U.S. International Trade Commission, the South Korea deal alone would result in an estimated net increase in American exports of up to $4 billion in its first decade. No magic bullet, but nothing to sneeze at either.

Meanwhile, economies around the globe are forging deals with each other. As Timmons notes: “There are 120 free trade agreements being negotiated. We’re party to one. We’re getting our clocks cleaned.”

Easton goes on to highlight some of the NAM’s other concerns about U.S. policy, namely the corporate tax rate (the second highest in the world) and the high cost of doing business in the country.

Earlier: Timmons writes about the pending trade pacts in the Daily Caller.

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Timmons on Free Trade in the Daily Caller

NAM President and CEO Jay Timmons highlights the pending free trade agreements with Colombia, Panama, and South Korea and discusses why they are critical to U.S. competitiveness this morning in the Daily Caller. He writes,

The pending trade agreements with Colombia, Panama and South Korea offer our elected officials a choice — support economic expansion and job growth or retreat from the world economy and watch U.S. manufacturing stagnate as our foreign competitors thrive. U.S. manufacturers are eager to remove the burdens on trade and grow their businesses.

The trade agreements have been pending for years now, and it’s time for Congress and the President to act.

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Governors Push for FTA Approval

This week the Senate Finance Committee holds two hearings on pending free trade agreements (FTAs).  Tomorrow, the committee will consider the Panama FTA, and Thursday the committee will turn to the South Korea agreement.

Ahead of those hearings, 25 governors have written congressional leaders urging them to pass the Colombia, Panama, and Korea FTAs.  The bipartisan group writes,

As the chief executives of our respective states and territories, we appreciate how important international trade and investment are to the economic vitality of our jurisdictions, presenting important opportunities for workers, and enhancing our overall competitiveness.  Export-related jobs pay better than non-exporting industries and, with nearly 95 percent of the world’s consumers living outside of the U.S., exports have been the focus of increased job growth in recent years.

These trade agreements have been awaiting congressional approval since 2007 (and 2006 for the Colombia deal).

Read the whole letter here.

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The Free Trade Deal with Colombia Supports an Ally

El Tiempo: Obama-Santos agreement on FTA, with 4 key points

Washington Post editorial, “Mr. Obama’s free-trade deal with Colombia“:

PRESIDENT OBAMA will welcome a bruised American ally to the White House on Thursday and take a step toward mending relations. For the past decade, Colombia has been a strong and steady U.S. friend at a time when leftist demagogues — including the presidents of two of its neighbors — have dedicated themselves to turning Latin America against the United States. Colombia’s reward was to be vilified by labor unions intent on torpedoing the free-trade agreement that it negotiated with the Bush administration and that has been neglected by Mr. Obama, who skipped Colombia during his recent tour of the region.

Mr. Obama’s agreement with Colombian President Juan Manuel Santos on an “action plan” for obtaining congressional ratification of the free-trade agreement could augur both a political and a foreign policy breakthrough for his administration. Mr. Obama, who will endorse the deal just days after launching his reelection campaign, gets points for political bravery: Though Colombia made substantial concessions to win the White House’s support, the pact will still be opposed by most unions and many Democratic members of Congress.

Bravery belated, perhaps, but very good in any case. As for the unions and anti-trade members of Congress, one doubts there would ever be a possible “compromise” that would lead them to support an agreement. Protectionism is a matter of core philosophy.

Rep. Steny Hoyer (D-MD), the House Democratic whip, issued a statement lauding the developments.

Today’s development on issues of worker rights and violence against workers is a positive and important step towards passage of the Colombia FTA. These issues needed to be addressed, and I am pleased the Administration and Colombian government have agreed to a concrete action plan. Colombia is a key ally in South America, and it is in our economic and national security interests to further strengthen that relationship. I look forward to working with the Administration to advance the Colombia FTA, which I continue to support. As we work to enact the three pending trade agreements, we must also extend expired provisions of the Trade Adjustment Assistance program that help American workers who have lost their jobs as a result of trade.”

Rep. Hoyer has been a clear and consistent supporter for many years, which also warrants mention as political bravery.

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For Manufacturers, Benefits of U.S.-Colombia FTA

Of course, we knew about these benefits several years ago, back when the agreement between the two countries was first negotiated and concluded.

From the White House Fact Sheet:

The Agreement will remove significant barriers to U.S. goods from entering Colombia’s market:

  • Over 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty free immediately, with remaining tariffs phased out over 10 years. With average tariffs on U.S. industrial exports ranging from 7.4 to 14.6 percent, this will substantially increase U.S. exports.
  • Key U.S. exports will gain immediate duty-free access to Colombia, including almost all products in these sectors: agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood.

And, on IPR:

Greater Protection for Intellectual Property Rights: The Agreement provides for improved standards for the protection and enforcement of a broad range of intellectual property rights, consistent with U.S. and emerging international standards of protection and enforcement. Such improvements include requirements for IPR protections that are critical to protecting copyrighted works like music, movies, and software from piracy in the digital environment; requirements for strong, deterrent criminal penalties against copyright piracy and trademark counterfeiting; requirements for robust patent and test data protection that respects the Doha Declaration on TRIPS and Public Health; and state-of-the-art protection for U.S. trademarks.

And …

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White House Announces U.S.-Colombia Free Trade Agreement

From The White House, a statement and fact sheets.

President Obama is committed to pursuing an ambitious trade agenda that will help grow our economy and support good jobs for U.S. workers by opening new markets.  To achieve that objective, we seek to provide a level playing field that creates economic opportunities for U.S. workers, companies, farmers, and ranchers, and that ensures our trading partners have acceptable working conditions and respect fundamental labor rights.  As part of this broader trade agenda, the Obama Administration has worked closely with the government of Colombia to address serious and immediate labor concerns.  The result is an agreed “Action Plan Related to Labor Rights” that will lead to greatly enhanced labor rights in Colombia and clear the way for the U.S.-Colombia Trade Agreement to move forward to Congress.  The U.S.-Colombia Trade Agreement will expand U.S. goods exports alone by more than $1.1 billion and give key U.S. goods and services duty free access in sectors from manufacturing to agriculture.  It will increase U.S. GDP by $2.5 billion and support thousands of additional U.S. jobs.

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Big News! Movement on Colombia Trade Agreement!

Unfortunately, however, not for us, but for our competition.

Today’s EU Trade News – weekly digest contained the following headline story about initialing the European Union’s free trade agreement with Colombia:

Trade agreement between the EU and Colombia & Peru
Chief negotiators of the European Commission, Peru and Colombia met in Brussels on 23 and 24 March to initial the final texts of an ambitious trade deal. The Free Trade Agreement will inaugurate a new framework of bilateral trade and investment relations between the European Union and these Andean countries. The initialing will be followed by translation, signature and adoption of this agreement so that it can enter into force as soon as possible for all parties

When the EU agreement goes into effect, European manufacturers will see their products’ prices fall 15 percent in the Colombian market compared to U.S. products.  If you walked into a store and saw two comparable products side-by-side with the major difference being one was 15 percent less expensive than the other, what would you do?  And that’s just what Colombian customers will do as well.

In the meantime, as another month passes as we move from March to April, organized labor’s mistaken opposition to the Colombian trade agreement has taken another $46 million of lost wages and benefits out of the pockets of American workers.1

Frank Vargo is vice president, international economic affairs, for the National Association of Manufacturers.

1The International Trade Commission estimates the Colombian agreement would generate at least $1.1 billion in new U.S. exports annually. The Commerce Department estimates that each $1 billion of exports supports about 6,700 U.S. jobs, so $1.1 billion of exports supports 7,370 jobs. Most of these jobs would be in manufacturing, where the average employee earns $75,500 annually. That works out to $550 million dollars in lost wages and benefits per year — $46 million per month.

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On Trade, Manufacturers Agree with Chile’s President

At a joint news conference with President Obama in Santiago, Chilean President Sebastian Pinera urges the United States (which in this case would mean first the Obama Administration) to enact the pending Free Trade Agreements with Colombia and Panama.

[We] would like to raise our voice to ask for countries like Colombia and Panama also to have free trade agreements with your country and may join in this Trans-Pacific Partnership initiative. It’s going to be a free trade area on both sides of the Pacific Ocean and where we will find the largest free trade market in the world.

Also, we are concerned about the delays and tensions of the Doha Round. I know that the United States is going to make efforts for this to move forward.

And then, on the other hand, I would like to raise to you a much closer collaboration in the field of science, technology, innovation and undertaking, because in modern times free trade has to be not only of goods but of ideas; not only of services but of knowledge; not only of investments but also of technology.

According to Bloomberg’s report from Chile:

The country was the first in South America to sign a free- trade agreement with the U.S. Since it took effect in 2004, Chilean exports to the U.S. increased 44 percent and imports from the North American country nearly tripled, according to Chile’s central bank.

The story is headlined, “Obama Pledges to End U.S.’s Neglect of Latin America’s Dynamic Economies.” Well, that would include Colombia and Panama, wouldn’t it?

Colombia Reports also covers the news, reporting that President Obama, like Secretary of State Hillary Clinton, fails to mention the pending FTAs in circumstances where the omission really stands out.

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An Obvious Omission in President’s Good Remarks on Trade

President Obama’s weekend radio address built on his trip to Brazil, Chile and El Salvador to make the cause for expanded U.S. trade with Latin America. From the White House transcript:

Latin America is a part of the world where the economy is growing very quickly. And as these markets grow, so does their demand for goods and services. The question is, Where are those goods and services going to come from? As President, I want to make sure these products are made in America. I want to open more markets around the world so that American companies can do more business and hire more of our people.

Here’s a statistic to explain why this is important. Every $1 billion of goods and services we export supports more than 5,000 jobs in the United States. So, the more we sell overseas, the more jobs we create on our shores.

Absent from the President’s remarks is any mention of Colombia and the ever-pending U.S.-Colombia Free Trade Agreement. Colombia boasts the second largest economy in South America, so its omission from the address stood out.

Last month, Senate Finance Committee Chairman Max Baucus (D-MT) also traveled to Brazil and fittingly included Colombia in his South American journey. From the Finance Committee, Feb. 26, “Baucus Meets with Colombian President, Highlights Need for U.S.-Colombia FTA, Renewing Andean Trade Preferences“:

Washington, DC / Senate Finance Committee Chairman Max Baucus (D-Mont.) today met with Colombian President Juan Manuel Santos. (continue reading…)

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