The White House today released the President’s 2010 Trade Policy Agenda. The report is here and U.S. Trade Representative Ron Kirk issued a statement,”President’s 2010 Trade Policy Agenda Focuses on Growing American Jobs Through New Market Access and Enforcing Trade Rules.” The USTR bold-faced this paragraph in Ambassador Kirk’s statement:

“Ninety-five percent of the world’s consumers live outside the United States, and the President’s trade agenda will help to get American workers and businesses access to as many of those customers as possible - in ways that affirm our rights in the global trading system and that reflect American values on worker rights, the environment, and open dialogue here at home,” said Ambassador Kirk. “The priorities in this Agenda can work to strengthen the rules-based global trading system on which the nations of the world depend, while opening markets and ensuring that American businesses and workers receive the economic benefits of trade.”

Agreed.

The President’s Trade Policy Agenda is part one of the report. On the pending Free Trade Agreements with Panama, Colombia and South Korea, the report again offers the Administration’s general, but non-committal support that might lead to enacting the agreements, perhaps.

If these outstanding issues can be successfully resolved, we will work with Congress on a timeframe to submit them for Congressional consideration so our producers can take full advantage of the opportunities presented by these agreements.

Nothing new there, really.

UPDATE (2:15 p.m.): CQ Politics reports, “Little Indication of Movement on Stalled Trade Deals.” Unfortunately so.

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.”

Senate Republican Leader Mitch McConnell (R-KY) responded to President Obama’s State of the Union address with remarks on the Senate floor Thursday. The Senator had sensible, cooperation-minded things to say about the energy development and expanded exports the President promoted the previous evening. From The Congressional Record, McConnell:

The President called for increased exports and for the Congress to pass trade agreements that have languished under the current majority in the Senate. Republicans agree with the need to increase trade and with the need to ratify trade agreements with Colombia and other important trading partners that so far have met resistance on the other side of the aisle. We also support passing a sensible bill to help Pakistan establish reconstruction opportunity zones that actually increase trade and do not impose self-defeating restrictions.

We agree with the President’s call to pass these agreements. We agree that these agreements will lead to more American jobs. The Congress should act on these agreements.

The President also called for producing more American energy. This is an area with a huge opportunity for American jobs that cannot—cannot—be sent overseas. We agree with his call for more clean energy produced here in America. We agree with his call for building more nuclear plants. We agree with his call for increased offshore exploration for oil and gas. We agree with his call for development of clean coal technologies. We should build a new generation of clean nuclear plants in this country.

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.”

From The Washington Post, “Jobs summit underscores dilemma“:

Obama says he does not have the money for the plan many of his liberal supporters say packs the biggest employment punch — direct federal investment in job creation. Instead, he came close to embracing a to-do list for the private sector that sounded rather familiar: weatherization, small-business incentives, regulatory and other help for exporters, and tax credits for employers who hire new workers.

Obama said the proposals could create jobs immediately, while providing long-term benefit at a relatively small expense to the federal government. “Overall, we generated a lot of important ideas,” he said. “Some of them, I think, can translate immediately into administration plans and, potentially, legislation.”

Regulatory and other help for exporters? U.S. Export-Import Bank Chairman Fred Hochberg co-chaired one of the break-out sessions, “Expanding Job Opportunities for America’s Workers Through Exports,” and the NAM believes the Eximbank is an important, effective supporter of private-sector exporters. Indeed, the head of one company that works effectively with the Eximbank is quoted in the Post story. Air Tractor of Olney, Texas, a manufacturer of ag planes (for purposes like spraying and seeding), has been featured as an Eximbank success story as it reaches into South American markets. (PPT slide from Eximbank’s 2009 conference.)

David Ickert, a senior executive of Air Tractor, a Texas firm that manufactures planes used in agriculture and fire suppression, said he would like to see the administration do more to free up financing for export-oriented firms.

“Exporting is one of the areas that has a lot more potential,” he said. “It can create jobs and does not cost a lot of money to fund. There just has not been enough attention paid to it from a policy standpoint.

Right!

The lack of attention — or rather, effort — has also been a problem with the three free trade agreements still pending which, if enacted, would quickly lower trade barriers to U.S. exporters. The White House should lead its export-related jobs creation by demanding Congressional approval of the FTAs with Colombia, Panama and South Korea.

President Obama gave a speech in Tokyo Saturday announcing the Administration’s plans to engage with the Trans Pacific Partnership countries to shape a regional agreement, an engagement that could produce real benefits for U.S. exporters and manufacturers. The Asia-Pacific region is the world’s fastest growing both in terms of trade and in the number of trade agreements being negotiated.  The NAM has long called for a trans-pacific trade agreement that would open up the region to U.S. exports.  America’s manufacturers cannot afford to be on the outside of an Asian trade wall looking in.

Reacting to the President in a statement, U.S. Trade Representative Ron Kirk made the case that a high-standard regional trade agreement under the Trans Pacific Partnership could help generate American jobs and economic prosperity.  (USTR fact sheet.) Exports will be the driver of U.S. economic recovery, but only if they have open access to world markets.

Strong U.S. leadership will be necessary to achieve a regional Pacific agreement that includes the highest standards already incorporated in U.S. bilateral agreements.  The United States currently has bilateral agreements with four of the seven Trans Pacific partners – Australia, Chile, Peru, and Singapore. (The others are New Zealand, Brunei, and Vietnam.) None of the gains for American manufacturers that were negotiated in those agreements should be abridged in any way, including intellectual property and investment protections and market access commitments. 

We were also pleased to see President Obama’s urging other nations to join the United States in demanding an ambitious and balanced Doha agreement, “not any agreement, but an agreement that will open up markets and increase exports around the world.”  This is the only road to success for the Doha Round.

The President’s focus on trade and trade agreements highlighted in his Asian trip should not, however, push other trade priorities off the table. On the contrary, they should produce a concerted effort to resolve any last issues with the three pending trade agreements – Colombia, Korea, and Panama – so these can be sent to Congress for approval.

News coverage…

• Associated Press, “APEC urges new growth model, climate pact progress“
• Reuters, “Obama pledges greater US engagement in Asia“
• Radio New Zealand, “Free trade deal may be in place in two years, says PM“

Frank Vargo is Vice President, International Economic Affairs, National Association of Manufacturers

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.

The testimony has been posted from yesterday’s Senate Commerce subcommittee hearing, “A World of Opportunity: Promoting Export Success for Small and Medium-Sized Businesses,” and the committee also has a nice selection of quotes here.

From Sen. Amy Klobuchar (D-MN), who chaired the hearing by the Subcommittee on Competitiveness, Innovation, and Export Promotion: “Exporting is literally a world of opportunity. Over 95 percent of the world’s customers are located outside the United States. Increasing our exports will mean more business, more jobs and more growth for the American economy.”

And from the manufacturer who testified, Tom J. Wollin, Director of International and Government Sales, Mattracks, Inc.,* of Karlstad, Minn.:

There are roadblocks for U.S. companies, big and small, when they export products internationally. Tariffs, duties, and value-added taxes can make the costs of U.S. products extremely prohibitive. For example, an American product that has a dealer cost of $35,000 when it leaves our shores can have a final cost reaching $60,000 to $70,000 when it reached its destination! U.S. innovation and product quality can overcome many obstacles, but a doubling in price can be crippling. The removal of these types of trade barriers are also needed to ensure new and continued sales growth internationally.

That’s a critical point. For all the many good and helpful government programs to promote manufacturing exports, sales must be cost-competitive. That’s why Congress’ resistance to enacting the pending free trade agreements with Colombia, Panama and South Korea is so discouraging. By ratifying the Colombia Free Trade Agreement, for example, Congress could quickly lower costs of U.S. exports to that country by an average of 14 percent.

* A plug for Mattracks — What a great product! A “rubber-track conversion system [that ] transforms most 4×4 vehicles into a true all-terrain vehicle equipped with rubber tracks that will go almost anywhere and bring you back!”

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.