Tag: U.S.-Panama Free Trade Agreement

U.S.-Panama Trade Promotion Agreement Goes into Effect Today

At long last, the U.S.-Panama Trade Promotion Agreement that President Obama signed into law more than a year ago is now in force. Manufacturers rely on strong trade agreements such as this and those with Colombia and Korea to remove tariff and non-tariff barriers to trade and investments. Free trade agreements lower costs for manufacturers and consumers alike and result in increased exports and growth for companies in the United States.

As one of the fastest growing markets in Latin America, Panama represents a significant opportunity for manufacturers in the United States.  Beginning today, Panama will drop tariffs on more than 86 percent of industrial and consumer products exported from the United States.  All remaining tariffs on industrial goods will be eliminated within 10 years. Additional information on how manufacturers in the United States can benefit from this agreement can be found on the International Trade Administration’s Website.

While the Trade Promotion Agreement improves market access for U.S. exporters, makes important progress in protecting manufacturers’ investments in Panama, and improves intellectual property rights protections, work remains to be done.  For instance, Panama must commit to combating illicit trade across its borders. While illicit trade is a worldwide problem, it is of particular concern in Panama given its strategic location as a main port of entry to the United States and the western hemisphere. USTR should continue working with their counterparts in Panama to address this problem.

Manufacturers welcome implementation of the U.S.-Panama agreement as a step towards greater trade liberalization around the world and we look forward to the launching of additional bilateral and regional trade negotiations to further open markets to U.S. exports. 

Jessica Lemos is director of international trade policy, National Association of Manufacturers.

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Barriers in Colombia Fall, But Not to American Manufacturers

The Canada-Colombia free trade agreement went into effect today. Canadian exports are now duty-free in Colombia.  Since the effective duty on manufactured imports into Colombia is 15 percent, that gives Canadian manufacturers an attractive advantage.

This adds further to the imperative of passing and implementing the U.S. – Colombia trade agreement.  Distributors, wholesalers, and retailers in Colombia may be willing to bear a 15 percent disadvantage in importing U.S. goods for a short time; but if they see that time difference persisting, many of them will consider shifting to Canadian suppliers wherever Canadian and American products compete with each other.

Passage of the U.S. – Colombia trade agreement by Congress does not mean the agreement goes into effect the next day.  Some months are needed after passage to ensure that both governments have done what they said they would do, that customs officials have their procedures and systems in place, and that necessary regulations have been published. So every day of legislative delay pushes implementation of the U.S. – Colombian agreement one more day into the future – adding to the risk of losing U.S. business.

Also, every day the pending trade agreements with Colombia, Korea, and Panama languish, American workers lose another $8 million in wages and benefits.  That adds up.  As of the afternoon of August 15, 2011, their cumulative loss was a staggering $12 billion.

Opponents of trade agreements are badly mistaken in thinking they hurt our trade. Over the past three years, American manufacturers have enjoyed a cumulative surplus of over $70 billion with our existing trade agreement partners.  During that same time, however, manufacturers faced a cumulative deficit of $1.3 trillion with countries that have not entered into trade agreements with us.

It is time to open more markets to American goods and services, starting with quick action by Congress to pass the three pending agreements.

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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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Colombia Free Trade Agreement Takes a Step Forward

The Obama Administration continues to move forward on increasing its commitment to an ambitious trade agenda by announcing its support for the last of the three pending free trade agreements (FTAs) - the agreement with Colombia, which has long been the most contentious. This morning U.S. Trade Representative (USTR) Kirk sent a letter to Congress indicating that USTR “has completed its preparatory work on the Agreement and stands ready to begin technical discussions with Members of Congress on the draft implementing bill and draft Statement of Administrative Action.” That means, let’s get to work on Colombia. This is a another positive step forward for the U.S. trade agenda. For years, our mantra has been “we want all three as quickly as possible.” We appreciate the work of USTR and the Administration to get to this point and look forward to working with them on moving forward.

Now, we’ve got all three on the line. It’s time to move them through Congress as soon as possible.‪ In January, Ways and Means Chairman Camp told USTR Kirk at a hearing that he wanted to pass all three pending trade agreements by July 1. At the time, that seemed an impossible dream, we were certainly skeptical.

The NAM has been working for years to build support for these three pending FTAs – and we will double our efforts. Manufacturers know these preferential trade agreements – which open foreign markets to our exports — are key to economic growth and job creation in America. These agreements will mean $9 billion annually in increased manufacturing exports to these three trading partners, according to the USITC.‪

The Colombian government under President Santos should be congratulated for their efforts in addressing the issues raised in the action plan announced a few weeks ago – but also for their independent efforts on domestic reforms that go far beyond anything ever discussed with the United States. Their work builds on the foundation laid by former President Alvaro Uribe, who presided over the negotiation of the agreement and who, over his two terms, did so much to strengthen and preserve Colombia.‪

There is a great deal of work to be done if we are to pass all three agreements by July 1. That date was not plucked out of thin air – it is the day that the EU-Korea and Canada-Colombia trade agreements enter into force, and our competitors’ manufactured goods and agriculture products gain a preferential advantage over ours. Our competitors are moving forward, and are far ahead of us in many markets. With today’s notification of the Colombia FTA we’re finally moving in the race. All we need is a good finishing kick to get over the line.‪‪

Doug Goudie is director of international trade policy at the National Association of Manufacturers.

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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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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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EU Approves Free Trade Pact with Korea, Gains Edge over U.S.

The European Parliament approved the EU-Korea trade agreement today, with 465 votes in favor, 128 against and 19 abstentions. The agreement will take effect on July 1, 2011, immediately removing the vast majority of Korea’s tariffs on manufactured goods (which average 8 percent) imported from European Union countries. You can read all about it here: http://trade.ec.europa.eu/doclib/press/index.cfm?id=680

This approval is a notable development, because it is the first time that the European Parliament exercised co-decision powers on trade agreements. Prior to the Lisbon Treaty, approval of trade agreements rested entirely within the Council. Now, the European Parliament must approve all trade agreements signed by the EU – putting them much closer to the U.S. model, where Congress must approve our trade agreements. Many speculated that this agreement might face a closer vote for approval in the EU Parliament. Still, 76 percent voted to approve –- a percentage far higher than most agreements receive in the U.S. Congress. The European Parliament obviously knows what manufacturers in America know: Removing foreign trade barriers is a boon for exports, jobs and economic growth.

The majority of the U.S. Congress knows this too, and wants to approve the three pending trade agreements we have with Korea, Colombia and Panama. Of course, before our Congress can approve trade agreements, they need the President to send them up. Our pending agreements have been awaiting Congressional approval since 2007. The President has indicated he will quickly transmit the U.S.-Korea FTA to Congress with an eye toward seeking approval in a matter of weeks – but that leaves Colombia and Panama languishing.

Together, the U.S. International Trade Commission (ITC) estimates the three agreements are worth more than $13 billion in new U.S. exports. The majority of those exports will be manufactured goods. Tens of thousands of American jobs will be created and sustained as a result of these trade agreements. They remove tariff and non-tariff barriers, open markets for our goods, give our manufactured products preferential treatment. The longer we hesitate, the more our competitors win our market share as they approve their own trade agreements. The time to move on trade is now.

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President to Sign Miscellaneous Tariff Bill, More Trade Action Needed

President Obama will host a White House bill-signing ceremony at 2:50 p.m. today  to sign H.R. 4380, the United States Manufacturing Enhancement Act, more commonly known as the Miscellaneous Tariff Bill.

This bill reduces tariffs for materials and chemicals that are essential for U.S. manufacturing processes but are not made or otherwise available in the United States. As the National Association of  Manufacturers’ “Key Vote” letter summarized:

The MTB is one of the most important short-term actions Congress can take to preserve and expand good American jobs, cut the costs of doing business in the United States and boost American manufacturing exports. U.S. manufacturers large and small use the MTB’s tariff suspension provisions to obtain raw materials, proprietary inputs and other products that are not available in our nation.

Without the MTB, the cost of these companies’ products will inevitably increase, forcing them to pass higher costs on to consumers and making their products less competitive. These higher costs translate into lost jobs for American workers.

Passage of the bill was complicated this year by political disputes over the nature of “earmarks” in the House, but H.R. 4380 still passed handily, 378-43, on July 21. The legislation’s signing into law today is terrific news for manufacturers and America’s workers.

But it is just one piece of a pro-jobs, pro-growth agenda. Depicting the Miscellaneous Tariff Bill as the foundation of a trade or manufacturing strategy is overselling it. For one thing, the legislation is about continuing tariff reductions about specific products and materials coming into the United States. The bill has never been controversial before and if considered by itself always elicits overwhelming votes of support. (See accompanying post, “Miscellaneous Tariff Bill, a Popular History.”)

More importantly, the bill does not address the lowering of trade barriers to U.S. exports shipped to foreign markets. Ninety-five percent of the world’s consumers live outside the United States, and U.S.-based companies have to compete to sell goods and services to those billions of people. That’s why it’s essential to enact agreements to lower tariffs and other barriers to U.S. exports, pacts such as the pending Free Trade Agreements with Colombia, Panama and Korea, then the Trans-Pacific Partnership, and multilateral agreements like the Doha round of the WTO.

President Obama has set a goal of doubling U.S. exports within five years, an ambitious goal that will require action on numerous fronts. The NAM recently released its “Blueprint to Double Exports in Five Years to detail the many steps — including major policy action — that Congress and the Administration must take to achieve the worthy, jobs-creating goal.

The President can be expected to highlight manufacturing and trade at the bill signing ceremony this afternoon, and manufacturers are delighted the tariff reduction bill will become law. And after that ….more work to do.

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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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Exports: Maine, Performing. Manufacturers, Underperforming?

A round-up of trade related news that mentions the National Association of Manufacturers:

Pat Mears, NAM’s director for international commercial affairs, spoke at the 2010 Trade Conference in Rockport, Me. The Bangor Daily News reported, “Maine looking to Canada, Asia for growth“:

Domestic demand is going to be slow in the U.S. Real growth is outside of the U.S.,” she said during her talk. “Ninety five percent of the world’s consumers live outside the United States.”

As for Maine, Mears said it is in a unique position. Most states, she said, do not have an international view of the world, but because Maine shares a border with Canada, Maine companies tend to think out-side of country lines already.

“Maine should be doing what Maine is doing,” she said. This includes working on exporting natural resources, working on wood composites and creating international ties.

Gov. John Baldacci also spoke. From his office, “Governor Unveils New Investment Initiative“:

ROCKPORT – Governor John E. Baldacci today unveiled a new Foreign Direct Investment initiative at the 30th Maine International Trade Day event held at the Samoset Resort.

The initiative will focus on increasing investments in Maine’s renewable energy and advanced materials fields, enhancing Maine’s capacity to be a center of excellence in wind energy, composites and advanced materials. The initiative will attract investments in business and R&D, further strengthening Maine’s internationally active, exporting companies and supporting the State’s universities.

Diagonally across the country in San Diego, Michele Nash-Hoff, president of ElectroFab Sales, reports on a speech by the Commerce Department’s point person for manufacturing. From “Can U. S. exports be doubled in five years?“:

Nicole Lamb-Hale, Assistant Secretary of Commerce for Manufacturing and Services, would answer “yes” to this question—if manufacturers diversify their sales in multiple markets and take advantage of the Department of Commerce’s International Trade Administration programs to help them.

“While the U.S. is a major exporter, we are underperforming,”  said Lamb-Hale at the Pathway to Manufacturing Prosperity conference held last week by Industry Week and New Equipment Digest. “Currently, less than one percent of American’s 30 million companies export outside the U.S.  There’s great potential for improvement.”

Before charging American manufacturers with “underperforming,” Lamb-Hale would do well to acquaint herself with her own department’s foreign trade regulations administered by the Bureau of Industry and Security (BIS).

We’ll assume the assistant secretary’s comments are not a shot at manufacturers, and we look forward to reading her speech for context. Suffice it to say, the Administration could help manufacturers perform if it submitted the pending free trade agreements with Colombia, Korea and Panama to Congress and pushed for their enactment. Those agreements have been negotiated, agreed to, are ready to go and could pass.

The pending FTA’s are certainly much further along than the Trans-Pacific Partnership, a worthy initiative from the Administration but still in its early stages. (Here’s a novel approach: A listening tour!) The Wall Street Journal covers the nascent TPP today, “US Tries To Build Consensus For Trans-Pacific Trade Talks.” The NAM’s Vice President for International Economic Affairs Frank Vargo is quoted.

Frank has recently been in an information-packed exchange with Global Trade Watch, a group that supports trade in theory but rarely in practice. Brad Peck covers the debate at the U.S. Chamber of Commerce’s blog, the Chamber Post, “Trade and Facts Win — Will the Economy?.” Brad tips his hat to GTW’s Todd Tucker for recent reasonable comments but then locates this paragraph from a 2004 essay Tucker wrote on “Chávez, Venezuela and US Reaction:”

The success of the global struggle against neo-liberalism and imperialism will depend on the ability of counter-hegemonic efforts to survive and present compelling alternatives to neo-liberal globalization. Part of this struggle necessarily involves defending state actors who are able to harness the power of the state apparatus for development and to show the possibility of pursuing more independent paths. Like other instances in the hemisphere’s history, the US Empire is most threatened by the power of example of successful, independent states. International solidarity is crucial to the ongoing success of this democratic, development-oriented example.

Hah! Since then Chavez’s counter-hegemonic efforts have produced 30 percent annual inflation and a wave of expropriations and human rights abuses.

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