U.S.-Panama FTA Archives - Shopfloor

Senate to Hold Hearings on Panama and Korea Trade Agreements

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Tomorrow and Thursday, the Senate Finance Committee will be holding hearings on two of the three pending Free Trade Agreements (FTAs). Up tomorrow is the hearing on the Panama agreement, followed by the hearing on the Korea agreement Thursday. The Colombia FTA had a hearing two weeks ago.

Jason Speer, Vice President of Quality Float Works, will be testifying on behalf of the National Association of Manufacturers at tomorrow’s hearing on Panama. His company is a fantastic example of how trade and exports don’t just benefit large multinational companies – but small American manufacturers as well.

Here is a small excerprt of Jason’s testimony:

Quality Float Works, Inc. is the premier manufacturer of hollow float metal balls and float valves in the nation. Our floats are used to level liquid controls in a wide variety of industries including gas, plumbing, oil and agricultural applications. Many products you see and use every day, from gas pumps to air conditioners, could not be operated without float balls. We currently have 23 employees between our primary facility in the suburbs of Chicago, Ill., and a branch office in Dubai, UAE.

Quality Float Works, Inc. is a family-owned small business that has experienced record growth in recent years due to overseas exports. In 2001, exported goods accounted for only 3 percent of our total sales. Since that time, we have seen foreign sales rise steadily as a result of proactive engagement with progressive markets. Last year, international trade accounted for one-third of our total sales. The passage of additional free trade agreements (FTAs) would further expand the opportunity for my business to enter untapped markets that could benefit from our products.

One-third of their sales depend on exports. The Colombia, Panama and Korea trade agreements will lower tariffs on Quality Float Work’s products, allowing them to increase their market share and exports even more.  

NAM Vice Chairman Doug Oberhelman, the CEO of Caterpillar, Inc., testified a few months ago before the House Ways and Means Committee on the Panama FTA, and noted how key that agreement is for Cat and its exports and  American-based jobs. Tomorrow, a company located not all that far from Cat will testify that the Panama agreement will be beneficial as well, for the same reasons and in the same ways. The only difference is the size of the company.

The FTAs represent growth for American manufacturing, American jobs, and the American economy. It’s high time to pass all three as soon as possible.

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

Governors Push for FTA Approval

By | America's Business, Around the States, Economy, Trade | No Comments

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.

It’s Time for Action on the Panama FTA

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This afternoon, NAM Vice-Chairman Doug Oberhelman, the CEO of Caterpillar, will testify before the House Ways & Means Trade Subcommittee on the pending Free Trade Agreement with Panama. As you can see in this advertisement that Caterpillar is running in a few Capitol Hill newspapers today, they strongly support quick passage of all three pending FTAs – adding in Colombia and Korea.

You might recall Will Marsh of Baker Hughes, Inc. testified on behalf of the NAM two weeks ago at a similar hearing on passage of the pending FTA with Colombia, and one expects a similar hearing on the FTA with Korea to be up at the Subcommittee in the near future.

It’s a powerful lineup for today’s hearing. The economic benefits for manufacturing in America that will accrue as a result of passage with our FTA with Panama may not be as large as we’ll see with Korea. But, we shipped $5.6 billion in U.S.-made manufactured goods to Panama last year. With the expansion of the Panama Canal – the largest public-works project on earth right now – there is going to be huge demand for manufactured goods of all kinds to support the construction work, the infrastructure, the workers, and the new facilities. By removing the average 8 percent duty our products face, the U.S.-Panama FTA will put our manufactured goods exports in a preferential position to fill that expanded demand.

Yesterday, it should be noted in passing, was the 77th anniversary of the passage of the “Reciprocal Trade Agreements Act” which passed Congress in 1934 by a vote of 274-111 (and 47 Members not voting). This act was the first to provide the President power to negotiate bilateral trade agreements with foreign nations. With it, Congress reversed decades of protectionist inclinations. In fact, the Act came just 4 years after the passage of the disastrous Smoot-Hawley Tariff Act of 1930, which raised U.S. tariffs to very protectionist levels — which in turn caused our trading partners to raise their tariffs and, most economists agree, prolonged and deepened the Great Depression. After the passage of the 1934 Trade Act, President Franklin Roosevelt called for a tariff-free Western Hemisphere that would unite fully half the globe in a closer trading relationship and would jump-start economic growth.

We’re not there yet – but passage of the Colombia, Korea, and Panama agreements as soon as possible would be another step on that road. With Peru, Chile, CAFTA, NAFTA and other FTAs that have been passed in recent years, America has a trade surplus in manufactured goods with our trade agreement partners. We need to pass all three pending agreements as soon as possible, and then look to new trade agreements to further boost our exports, increase U.S. employment and grow our economy.

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

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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.”

Senators Tell Administration: Move All Three Trade Agreements

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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. Read More

Mr. President, Submit the Colombia, Panama Trade Agreements

By | Labor Unions, Trade | No Comments

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. Read More

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

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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.

Good Points, Mr. President

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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.

More Business Reaction to SOU

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Nice roundup by WSJ, “CEOs React to State of the Union“:

President Barack Obama made some concessions to the business community in his State of the Union address Tuesday, saying he’d like to lower the corporate tax rate and foster U.S. job growth and innovation. Many CEOs reacted with skepticism as to the President’s ability to deliver on these areas, but noted positively the President’s changed tone in addressing the business community.

Lots of good comments, including Greg Babe of Bayer talking about trade.

Greg Babe, CEO of Bayer North America, was encouraged by President Obama’s mentions of innovation. Bayer’s North American operations spent $700 million on research and development in 2010, and Mr. Babe says the yearly uncertainty on whether R&D tax credits will be renewed is a stress to the company. Mr. Obama didn’t specifically mention these credits.

Mr. Babe says he would have liked President Obama to speak more on free trade. “A lot of other free trade agreements are in the queue waiting for [Korea] to move,” he says. Mr. Babe says the lack of agreements negatively affects the company’s business globally.

Reuters, reporting from Davos, “Obama dose of austerity gets two cheers from CEOs“:

John Studzinski , senior managing director of U.S. private equity company Blackstone, told Reuters Insider in Davos that “the devil is in the details” of Obama’s words.

“Innovation is very important. We have to look at American workers,” he said. “The debate on spending and spending freeze is predicated on the fact that it’s been difficult.”

On trade, the President again alluded his desire to resolve issues with the pending Free Trade Agreements with Panama and Colombia. But what are they? Are we ever going to hear specifics?

President Obama’s speech to the U.S. Chamber of Commerce on Feb. 7 would seem like a good opportunity to provide a detailed plan for moving these Colombia and Panama FTAs. We’d be happy with a clear statement: “I am submitting these agreements to Congress for action.”

UPDATE (3:30 p.m.): Christian Science Monitor, “What businesses liked in the State of the Union – and what they didn’t,” which includes this funny observation from Brian Bethune, chief US financial economist for IHS Global Insight in Lexington, Mass.: “After being estranged from someone for two years, you can’t just call them up out of the blue and say, ‘Let’s go out on a date.'”

Manufacturers Testifying on Free Trade Agreements

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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.