Tag: U.S.-Colombia FTA

U.S.-Colombia Trade Pact Would Strengthen Energy Security

William D. Marsh, a vice president for the top-tier oilfield service company, Baker Hughes Inc., was a witness Thursday at a House Ways and Means Trade Subcommittee hearing on the pending U.S.-Colombia Free Trade Agreement (FTA). Testifying on behalf of the National Association of Manufacturers, Marsh made an argument that should carry more punch as gas prices rise: The FTA would contribute to America’s energy security.

From Marsh’s testimony:

Because of trade preferences, Colombia’s exports have been entering the United States duty free (though that has temporarily expired). By contrast, Colombia’s average duty on our imports from the United States averages five percent with some tariff peaks at 10 to 20 percent. Eliminating that duty would allow Baker Hughes to more effectively compete in Colombia, increase our exports to serve Colombia’s expanded plans for oil and gas projects, and create more highly-skilled jobs here at home….

[Colombia] is a major prospect for new oil and gas development. According to media reports, the Colombian government plans to increase oil production up to one million barrels per day by the end of 2012, and activity is likely to remain high for the next decade. As a market leader in oilfield services, Baker Hughes intends to be a substantial part of that market. United States trade policy should facilitate our participation in that responsible development.

From a security perspective, there are advantages to developing Western Hemisphere energy sources like those in Colombia. Colombia is considered a U.S. ally with a relatively stable government and economy. Oil and gas from Colombia could displace oil from less secure foreign sources of supply. Helping Colombia maintain a strong economy is also in our national interest. Therefore, adopting this reciprocal treaty is a win for both countries.

Right. Just as it is better economically and strategically to import oil and natural gas from Canada than, say, Russia, it would be preferable to have Colombia instead of Venezuela as a major supplier of energy to the United States.

In a news release, Subcommittee Chairman Kevin Brady (R-TX) provided more details about the energy security implications of the U.S.-Colombia FTA: (continue reading…)

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House Panel to Hold Colombia FTA Hearing Tomorrow

Tomorrow morning the House Ways & Means Trade Subcommittee will hold a hearing on the Pending Free Trade Agreement (FTA) with Colombia, the first in a series of hearings to examine each of the three pending FTAs (the others are with Panama and Korea). William Marsh of Baker Hughes Incorporated, a NAM Member, will be testifying at the hearing.

Colombia is an important Western Hemisphere destination for U.S. manufactured goods exports. In 2010, the U.S. exported over $11 billion worth of manufactured goods to Colombia. Manufactured goods account for 85 percent of total U.S. merchandise exports to Colombia.

Small and medium manufacturers will strongly benefit from the U.S.-Colombia Agreement as over 10,000 small and medium sized companies export manufactured goods to Colombia, representing 85 percent of total U.S. exporters.

U.S. manufactured goods exports to Colombia have grown by 130% over the past five years. Last year we had a $7 billion trade surplus in manufactured goods with Colombia. Manufacturers are looking forward to the hearing tomorrow to discuss with members of the subcommittee of the tremendous economic benefits  of passing this agreement as soon as possible. Every day we are losing market share and manufacturers can no longer afford for additional delays.

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Hearing Set on Trade Pacts as Senators, WaPo Call for Action

From the Senate Republicans, @Senate_GOP:

At 3:30 ET today, Leader McConnell, Sen. Orrin Hatch, and Sen. @robportman will hold a press conference on free trade agreements.

Sens. McConnell, Hatch, and @robportman will call for immediate action from the president on pending free trade agreements.

Washington Post editorial, “Time to act on free trade:U.S. agreements with South Korea, Colombia and Panama should be approved — soon“:

The potential for a trade policy train wreck is real. Everyone needs to focus less on the political tit for tat and more on the policy case for getting these deals done as soon as possible, which is clear and strong. “It is time to identify the specific steps Colombia and Panama must take to move forward,” Mr. Baucus said Wednesday, “so we can finally approve our free-trade agreements with these countries, increase U.S. exports and create jobs here at home.” From a Democrat, that can hardly be considered unfriendly advice, and Mr. Obama would be wise to take it.

House Ways and Means Subcommittee on Trade, “Brady Announces First in a Series of Three Hearings on the Pending, Job-Creating Trade Agreements“:

Congressman Kevin Brady (R-TX), Chairman, Subcommittee on Trade of the Committee on Ways and Means, today announced that the Subcommittee will hold a series of hearings on the pending trade agreements with Colombia, Panama, and South Korea. According to the President’s own statements, these agreements have the ability to create over 250,000 American jobs. The first hearing will address the agreement with Colombia. The hearing will take place on Thursday, March 17, 2011, in the main Committee hearing room, 1100 Longworth House Office Building, beginning at 10:00 A.M. The Subcommittee will soon advise regarding hearings on the trade agreements with Panama and South Korea.

Testifying on behalf of the National Association of Manufacturers will be William D. Marsh, vice president legal – Western Hemisphere — for  Baker Hughes. Also scheduled to testify is Ambassador Miriam Sapiro of the U.S. Trade Representatives Office.

The USTR on Tuesday also hosts the American Chamber of Commerce in Korea on its annual visit to Washington, D.C. Last week U.S. and Colombian officials met in Washington to discuss the pending FTA. (Also here.)

The Miami Herald reports on President Obama’s upcoming trip to Brazil, Chile and El Salvador, “President Obama’s Latin agenda takes shape.”

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Senators Tell Administration: Move All Three Trade Agreements

U.S. Trade Representative Kirk testified on the President’s 2011 Trade Agenda at the Senate Finance Committee this morning. As expected, the focus was squarely on lack of progress on the Colombia and Panama free trade agreements. Unfortunately, despite an advance request by the Chairman and Ranking Member for a specific timetable on concluding the two agreements, Ambassador Kirk did not provide much of a road map on how the U.S. will proceed in addressing what the Administration feels are outstanding issues in both agreements.

U.S. Trade Representative Ron Kirk

When he appeared in front of the House Ways and Means Committee last month, Kirk promised the Administration wants to move the Korea trade agreement (KORUS) as soon as possible, and it would intensify efforts to resolve outstanding issues in the Colombia and Panama agreements so they could be moved as quickly as possible to Congress for approval –- by the end of 2011 if possible. At the time, we argued that all three agreements need to move as quickly as possible. We still absolutely believe this is the way things should proceed. The agreements with Colombia, Korea and Panama have languished since 2007, while our competitors in Europe and Asia continue to move aggressively to open those markets and gain preferential access for their manufactured goods exports.

The Chairman and Ranking Member of the Senate Finance Committee made it very clear they feel the same way. Chairman Max Baucus (D-MT) was crystal clear: “The time is long past to ratify the Colombia agreement,” said, continuing, “None of these agreements will pass unless they are all packaged together this year.” Ranking Member Orrin Hatch (R-UT) told Ambassador Kirk that he was tired of unfulfilled promises on Colombia and Panama. “It is the Administration’s inaction that speaks volumes – and these promises we’ve heard are inadequate,” the Senator said. Sen. Hatch pulled no punches in saying that he will view any attempt to move the KORUS FTA without action on Colombia and Panama in a very negative light. (continue reading…)

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Mr. President, Submit the Colombia, Panama Trade Agreements

Top former Executive Branch trade officials recently sent a letter (available here) to President Obama and Congressional leadership calling on the President to submit the pending U.S. Free Trade Agreements with Colombia and Panama to Congress for enactment. The bipartisan signers were six former United States Trade Representatives; two former White House Envoys to the Americas; and 10 former Assistant Secretaries of State for the Western Hemisphere.

The letter with a strong appeal to geopolitical imperatives — standing by your allies. It has been more than five years since the U.S. negotiated its free trade trade agreement (FTA) with Colombia and nearly five years since negotiations with Panama. Delays cast into question America’s reliability as a partner.

For manufacturers and farmers and U.S. workers, there economic argument is especially compelling. First, for Colombia:

Colombia has been the largest purchaser of U.S. agricultural products in South America. In the five years prior to 2008, U.S. exports of wheat, corn, soybeans, soy oil were expanding 38 percent per year, accounting for nearly $4 billion a year in U.S. exports. In recent years, however, while the United States failed to move forward to ratify its trade agreement with Colombia, Colombia concluded trade negotiations with Canada, Chile, and the European Union, and implemented new trade agreements with the Mercosur bloc: Argentina, Brazil, Paraguay, and Uruguay. Each of these countries is a competitor with the United States for agricultural exports to Colombia.

As a result, between 2008 and 2009, total U.S. exports of agricultural products to Colombia dropped by 48%. That decline in U.S. exports continues with an additional drop of 45% in 2010. We have seen U.S. exports plummet while Colombia’s imports of those products have held steady and Argentina and Brazil’s sales to Colombia have climbed by over 20 percent. In dollar figures, U.S. exports of corn, wheat, and soybeans to Colombia dropped from $1.1bn in 2008 to $343mm in 2010, a decline of 68%. That nearly $700
million in lost exports costs U.S. jobs.

With Panama, the authors cite the possibility of increased manufactured goods exports from the United States. (continue reading…)

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From the President, a Solid Trade Agenda. Now, Let’s See Action

President Obama released his 2011 Trade Agenda on Tuesday. It seems a bit more forward in promising action on trade than in previous years, which is good. America has effectively been in a time-out on trade for the last four years, and our industrial competitors around the world have been using that to their distinct advantage. The European Union, Korea, Canada, Australia and other nations have been in a flurry of bilateral and regional trade agreement negotiations that will provide their exports with preferential treatment at the expense of our own.

The President’s 2011 agenda sets forth a number of highly laudable goals, including passage of the U.S.-Korea Free Trade Agreement (FTA), continued support for the National Export Initiative (NEI) goal of doubling U.S. exports in five years, concluding a balanced and ambitious agreement to the World Trade Organization (WTO) Doha Round, finishing negotiations on the Trans-Pacific Partnership (TPP), and bringing Russia into the WTO. He also promises engagement with Colombia and Panama to resolve outstanding issues so they can be sent to Congress for approval. President Obama also calls for strong enforcement of our trade laws, strong protection of our intellectual property, commits to continuing America’s core strengths in innovation and competitiveness.

The agenda is certainly one that manufacturers can endorse. Two-thirds of U.S. exports are manufactured goods.

It’s one thing to set goals, and another to deliver them. On the pending FTAs, the National Association of Manufacturers wants all three pending agreements submitted to Congress and acted upon as quickly as possible. Passing the three pending FTAs is the fastest way to aid our national goal of doubling exports. The Korean deal is huge for manufacturers. The strides Colombia has made over the last decade are nothing short of astounding, and the commitments it has already lived up to in addressing labor issues have been exemplary. Panama has met all demands made upon it. There is strong bipartisan support in Congress for all three agreements, and it is quite possible we could celebrate Flag Day by opening three new markets worth $13 billion annually in increased U.S. exports. By the Administration’s math, that’s more than 60,000 new jobs that could be created.

On the WTO Doha Round, the Administration has been correct in refusing to settle for the anemic texts on the table – they do not open high-value markets in advanced developing nations. The NAM is in close alignment with this position. Without significant concessions by Brazil, China, India and others, the Doha Round will result in virtually no new benefits for manufacturing in America. We continue to urge Ambassador Kirk and his team to drive this point home to the recalcitrant negotiators in those nations – if they can make commitments equal with their economic size, the entire world will reap the benefits.

The President’s annual Trade Policy Agenda, like the annual Budget, is a chance for the Administration to put forth its philosophical views on how it plans to engage in market liberalization and economic growth. There is much here that, if it can be delivered – and quickly – would create jobs and increase our domestic economic development. The key question is not what the Administration wants to do, it’s how fast the President is willing to do it.

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On Trade: Promises, Promises

U.S. Trade Representative Ron Kirk is testifying before the House Ways & Means Committee on the Obama Administration’s trade agenda this morning. I am sitting in the hearing, and there is good news and bad news.

Good news: We are extremely pleased to hear Ambassador Kirk indicate the timeline for Congressional consideration of the Korea Free Trade Agreement (FTA) is “weeks.” (Ambassador Kirk’s opening statement.) The European Union’s FTA with Korea (to be approved next month) threatens U. S. manufacturing exports to Korea, and swift completion of our agreement is necessary to keep our competitive balance. 

Bad news: No real new thoughts on how to move our languishing agreements with Colombia and Panama.  Amb. Kirk did say the Administration will “immediately intensify our engagement to resolve the outstanding issues with Colombia and Panama so that Congress can consider them this year.”

We did that with Korea on autos, and it resulted in real improvements to that agreement. The National Association of Manufacturers supported the supplemental agreement.

But it took six months, and addressed a real problem of specific market access. With Colombia and Panama, the issues are not specific. In fact, we would argue they aren’t even real issues. We would argue that the enforceable labor provisions included in our agreements as a result of the May 10 2007 bipartisan agreement addressed these concerns.

Efforts have also been made by Colombia and Panama in recent years. Colombia was removed from the International Labor Organization’s watch list this year. In short, this Administration has had two years to provide an actionable list of concerns. As Rep. Sam Johnson (R-TX) has just noted, these agreements were signed in 2007, and it is now 2011.

Chairman Camp (R-MI) has just asked Ambassador Kirk to elucidate the outstanding issues in Colombia, noting the agreement was signed in 2007. “We need to address underlying concerns on labor rights” was the response.

“We need specifics and an action plan, we need benchmarks” responded the Chairman.

We couldn’t agree more. What I am fairly certain about is that our competitors in Europe, Canada, Korea and MERCOSUR have a pretty specific list of manufactured products they’ll be shipping to Colombia and Panama as they take advantage of THEIR trade agreements.

American workers benefit from our nation’s exports. Exports create jobs in American factories. Agreements with Colombia and Panama will lead to billions in increased U. S. exports. We need all 3 agreements. And we need them now. In fact, we needed them in 2007.

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Good Points, Mr. President

From President Obama’s remarks at the U.S. Chamber of Commerce on Monday:

We know what it will take for America to win the future.  We need to out-innovate, we need to out-educate, we need to out-build our competitors.  We need an economy that’s based not on what we consume and borrow from other nations, but what we make and what we sell around the world.  We need to make America the best place on Earth to do business.

Indeed. From the National Association of Manufacturers’ “Manufacturing Strategy for Jobs and a Competitive America“:

We want the United States to be the best place in the world to headquarter a business. The United States should be the best place to innovate and do the bulk of a company’s global research and development. And the United States should be a great place to manufacture for the North American market and to serve as an export platform for the global market.

And, one of the two applause lines in the President’s 35-minute speech:

And I will tell you I will go anywhere anytime to be a booster for American businesses, American workers and American products.

OK. How about Capitol Hill, with a copy of the U.S.-Colombia Free Trade Agreement under your arm, asking members of Congress to enact the jobs-creating agreement? Tuck a copy of the U.S.-Panama FTA in the portfolio, too.

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Indications of Signs of Moving on the U.S.-Colombia Free Trade Agreement

From the media briefing Friday, Jan. 28, after a meeting of Secretary of State Hillary Clinton and Vice President Angelino Garzon of Colombia:

QUESTION: Madam Secretary, two points. The first one is: (inaudible) Vice President Garzon asked two days ago the Obama Administration to send this year to Congress the Free Trade Agreement. With all due respect, is the – you – Obama Administration going to do that, yes or no?

SECRETARY CLINTON: Yes.

QUESTION: This year?

SECRETARY CLINTON: Yes

The follow-up adds various qualifiers, but there’s no misconstruing the “yes.”

Brian Wingfield at Forbes this morning provides a good round-up of positive developments, “Colombia Trade Agreement Gaining Momentum In Washington,” pegged to the return to Washington of Colombia Ambassador Gabriel Silva, who represented Colombia in the early 1990s.

According to Silva, the U.S. is seeing what opportunity it has in Colombia slip away. Documents provided by the Colombian Embassy show that the U.S.’ share of agricultural imports to Colombia has dropped from 46% in 2008 to 22% today, due in part to the integration of Latin American markets. Last May Colombian officials concluded negotiations on a free trade agreement with the European Union, and in August they signed a trade deal with Canada that is expected to become effective later this year. By the end of the decade, China could replace the U.S. as Colombia’s largest trading partner.

“We are asking the U.S. to turn things around,” says Silva.

Among the evidence for momentum, Wingfield cites the comments by Sen. Max Baucus (D-MT) after President Obama’s State of the Union address, which were: “Our free trade agreements with Colombia and Panama were signed more than three and a half years ago, so it’s extremely disappointing the president did not lay out a timeline for submitting them to Congress.”


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Growing Exports to Peru Proves Merit of Colombia FTA

From the U.S. Department of Agriculture, “USDA Acting Under Secretary Michael Scuse Leads Agriculture Trade and Investment Mission to Peru“:

WASHINGTON, Jan. 28, 2011 –USDA’s Acting Under Secretary for Farm and Foreign Agricultural Services Michael Scuse will lead 20 U.S. companies on an Agribusiness Trade and Investment Mission to Lima, Peru, Jan. 31-Feb. 3, 2011, to meet with 150 Peruvian and Ecuadorian entrepreneurs and buyers to develop business ties and explore opportunities for joint ventures. …

“Peru and Ecuador are important U.S. trade partners,” said Scuse. “Both countries have experienced a decade of political, social and economic change that has created a dynamic environment for economic growth. Both are keen on expanding trade and investment with the United States, as well as with other Pacific-Rim countries through the Trans-Pacific Partnership to which the United States is a party. This mission provides an excellent opportunity for U.S. agribusinesses to make contacts, exchange information, and sign sales agreements.”

The USDA reports that since  implementation of the U.S.-Peru Trade Promotion Agreement in February 2009, U.S. exports of agricultural, fish, and forest products expanded by 70 percent.

That’s great, but Peru’s population is approximately 29 million. Colombia’s population is 45.7 million. Why does the Administration keep delaying submission of the U.S.-Colombia FTA to Congress for enactment.

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