Progress announced today in ratifying trade agreements with Korea, Panama and Colombia. These three trade agreements support American companies seeking export growth.
Read more in this news release by the U.S. Chamber of Commerce.
Looks like compromise is underway to soften ratification of three, vital Free Trade Agreements for the US. A tie-in that will preserve the Trade Adjustment Assistance (TAA) program to provide aid and retraining to workers who have lost their jobs due to outsourcing brought about by FTA activity.
Last month, the European Union ratified its FTA with South Korea. Even though the US lost its “first in, best dressed” place in line, once this and other two FTAs (Panama, Colombia) are enacted our nation’s brands and innovation will attract new customers through reduced and eliminated tariffs and quotas. Industry growth numbers will spike, jobs will be secured, and local and regional tax coffers will fill.
Here’s the ultimate irony, one with dramatic consequences to US families: a federal policy to stimulate our flagging economy that actually puts more of our jobs at risk. “Buy American” provisions found within this year’s $788 billion stimulus spending package expose US workers in several manufacturing sectors to job loss. It’s that the stipulations of our national and local governments buying only “all-US-sourced goods” places an undue burden on most manufacturers who’ve sourced raw materials and components from foreign suppliers for decades. So – no competitive bids on public works contracts means loss of revenue… and layoffs.
That, coupled with the current administration lurching toward protectionist duck-n-cover, put the US as a whole at risk of losing ground in its export growth. Whose interests in the US are being served, in the long run? Considering that some 80% of Americans work for small to medium-sized manufacturers — all of whom partake of the international business pie — it’s dicey to start tariff wars. This month has produced a costly tit-for-tat between the US and China, having to do with Tires and Chickens. If other industries besides poultry and tires run for cover, then Sino-US upsmanship could tip the balance of world trade badly against our manufacturers. (I’ve written in an earlier blog post about the administration’s perceived double-talk regarding NAFTA-initiated reciprocal trucking rights for Mexico … to date, no satisfaction on either side of the fence)
I’ll be watching how our administration plays both sides of the crowd at this weekend’s gathering of the G20 (the group of big, rich, and emerging economies) in Pittsburgh.
A voice in the wilderness has been the U.S. Chamber, whose president and CEO Tom Donohue cheers from the bleachers for the US worker, while boosting the association’s goal of doubling US exports by 2014. Speaking recently in East Lansing, Michigan, Donohue reminded guests that “it was our free enterprise system and our values of individual initiative, hard work, and innovation that built our great country—and trade has been central to our success.” Read an excellent synopsis of the talk here.
What would I do if I were running the joint? Let the free market reign … remove obstacles to our successful competition and ratify pending free trade agreements with Korea, Colombia, and others.
Stalemate, or Escalation? American companies have too much at risk right now to get drawn in to this game. Unfettered, they can sustain competitive edge and continue to expand exports… which would make the US Chamber cheer even harder.
Timing is everything, and I wonder how much more water the pending free trade agreement (FTA) between Colombia and the US must tread before its ratification by the US congress. And today’s political waters are shark-infested, indeed. Signed and ratified just before Thanksgiving 2006, as reported in Wall Street Journal, the FTA yet remains a bargaining chip in today’s contentious partisan politics.
Pay heed in the coming week to news coverage of the 29 June meeting between Presidents Obama and Uribe. We will see our president test his political moxy, urging President Uribe and proponents of the FTA to keep their heads above water while our polarized house and senate duke it out over vital economic issues. Here’s where the moxy comes in: as he holds back the lifesaver, he will at the same time ask if the US can base its narco-surveillance operations at a Colombian airbase, regardless of FTA ratification or defeat.
The irony? The FTA’s opponents don’t gain anything by blocking its passage except a notable partisan victory. To be sure, the Colombian FTA has “kick me” painted on its backside, a carry-forward from the Bush administration and now held at arm’s length, noses plugged, by the house and senate majority leaders. The influence of AFL-CIO and the debt owed to them by the new president cannot be underestimated in this skirmish.
But the fact remains that U.S. markets are already open to Colombian goods, under the Andean trade preferences act. This new FTA would open Colombian markets to U.S. exports, which currently face tariffs as high as 35 percent and are losing market to EU and Asian competitors. When that field is leveled, American exporters will realize increased revenue in Colombia through more competitively priced goods and services, which helps counter our ballooning trade deficit, ensures employment for millions of Americans, and of course contributes to the business tax base to help reverse state and federal deficits.