The third anniversary of the signing of the U.S.-Colombia free trade pact came and went this month with the Obama administration still negotiating the fine print, Congress showing little interest and business groups frustrated by the lack of action on trade deals.
“For most of 2009 we were willing to sit on our hands” as the new president struggled with the recession and health care, said Bill Lane, a government affairs official for Caterpillar Inc.
“We can’t maintain that anymore. It’s time we started moving forward,” said Lane, who is also corporate co-chairman of the Latin American Trade Coalition.
Critics of President Barack Obama’s trade policy point to the failure by Congress to act on the three bilateral free trade agreements — with Colombia, Panama and South Korea — signed during the George W. Bush administration.
They say delays in implementing those pacts, under which those three countries would cut tariffs and remove barriers to U.S. goods and services, have cost the United States billions of dollars and hundreds of thousands of jobs.
Lane said the United States has paid Colombia $2.3 billion in tariffs since the agreement was reached three years ago. A report prepared for the U.S. Chamber of Commerce estimated that 383,400 American jobs could be affected if the U.S. continues to do nothing while the European Union and Canada proceed with trade agreements with Colombia and South Korea.
“The U.S. risks getting stuck on the outside looking in,” said John Murphy, the chamber’s vice president for international affairs
The last free trade agreement approved by Congress was with Peru in 2007, the same year the Democratic-controlled Congress killed “fast track,” a procedure that prevented lawmakers from tinkering with already-completed trade deals.
Resistance to free trade deals runs deep among many Democrats, who contend they have contributed to a loss of jobs in this country while not doing enough to protect worker rights and the environment in the partner country.
Specifically, there’s opposition to Colombia because of violence against labor leaders there, Panama because of its status as a tax haven and South Korea because of its restrictions on U.S. beef and auto imports.
“We are not standing still,” U.S. Trade Representative Ron Kirk told the U.S.-Korea Business Council recently, saying his office was carrying out a “thorough review” of the Korea deal as well as the other two agreements.
Kirk cited government estimates that U.S. exports to Korea could rise $10 billion to $11 billion annually with conclusion of the accord. But “it is absolutely crucial that we get it right,” he said. “We are still dealing with the legacy of Korea’s long-closed market, especially with respect to autos.”
Obama also linked jobs and trade during his recent trip to Asia, predicting that hundreds of thousands of jobs would be created if the U.S. can increase exports to the Asia-Pacific region by 5 percent.
The trade representative’s office said it has made progress in the first 10 months of Obama’s presidency in pursuing cases before the World Trade Organization on protecting intellectual property and restraining Chinese raw materials exports. It also says it has resolved long-standing beef disputes with the European Union and Chile while advancing the organization’s long-stalled Doha Round of multilateral trade talks.
But even Obama allies complain the administration is not doing enough on trade.
“For the past 10 months, the United States has lacked a comprehensive trade agenda. And that absence is palpable,” Senate Finance Committee Chairman Max Baucus, D-Mont., said in a recent speech.
Baucus said a new blueprint should emphasize labor rights and the environment, enforcing existing rules, focusing on Asian trade and retraining American workers dislocated by trade.
While a majority of Republicans support free trade initiatives, Democrats are split.
A bipartisan group of 88 House members, led by Reps. Adam Smith, D-Wash., and Dave Reichert, R-Wash., wrote Obama urging action on the South Korea agreement. On the other side, 127 House Democrats are sponsoring a bill by Rep. Michael Michaud, D-Maine, to review whether existing trade agreements — including WTO agreements and the North American Free Trade Agreement — meet labor, environment, product safety, human rights and currency manipulation standards.
“The deck is stacked against our workers and has been for some time,” complained Rep. Louise Slaughter, D-N.Y., joining Michaud at a news conference urging a shift in U.S. trade policy when new world trade talks open in Geneva next week.
Thea Lee, deputy chief of staff at the AFL-CIO, said unions believe the administration should take a more proactive trade stance — not to advance what she said were “flawed” trade agreements but to steer the Doha Round to help American workers and to call out the Chinese on currency manipulation and unfair trade practices.
On the Net:
U.S. Trade Representative: http://www.ustr.gov