Economy & Budget

Democrat Trade Inaction Cuts into U.S. Business

Canada’s ratification last month of a free-trade agreement (FTA) with Colombia leaves U.S. producers and exporters sidelined to watch more than three-quarters of a billion dollars in potential trade with Colombia and more than 1,600 potential U.S. jobs evaporate. Billions of dollars more and tens of thousands of new jobs are at stake with other FTAs facing the same fate.

A Democratic Congress and White House, fully conscious of America’s economic woes, continue to maintain a stranglehold on U.S. trade expansion by their failures to ratify three trade agreements negotiated by the George W. Bush Administration. In the case of the U.S.-Colombia trade agreement, Democrats—bowing to U.S. labor and human rights groups, who seem to ignore progress in Colombia—have held that stranglehold for more than three-and-a-half years.

The amount of trade at stake for the United States in the first full year of the three agreements’ implementation is $2.91 billion, according to the American Farm Bureau Federation—that’s $815 million in exports to Colombia, $195 million to Panama and $1.8 billion to South Korea. The meat and poultry export share of that would $2.3 billion, according to the American Meat Institute (AMI).

Ratification and full implementation of the FTAs would result in the creation of 29,524 new meat and poultry jobs, according to AMI, with the creation of 10,293 jobs for the pork industry, alone, the National Pork Producers Council says. 

Failure to ratify the U.S.-Colombia FTA “could cut current U.S. wheat sales to Colombia by more than half because Canada is close to ratifying its own FTA with Colombia,” U.S. Wheat Associates President Alan T. Tracy warned in The Washington Times last year. Tracy served in the Reagan White House as special assistant to the President for agricultural trade and food assistance.

“It is disappointing the Canadian parliament has approved a trade agreement with Colombia, while Democrat leaders in Congress have allowed the United States-Colombia Trade Promotion Agreement to languish since 2006,” Rep. Jerry Moran, (R.-Kan.), told HUMAN EVENTS. “With a struggling economy, now more than ever manufacturers and agricultural producers need new markets. Every day Congress fails to approve a trade agreement with Colombia, it forfeits market share to Canada. This is especially true in the wheat market where tariffs would be immediately eliminated for U.S. wheat entering Colombia if the U.S.-Colombia agreement were approved.”

“Now that Canada has gained preferential access ahead of us, we are likely to be operating in catch-up mode for years to come,” said a July 8 letter to the House Leadership from a comprehensive group of 42 agricultural trade organizations—the American Farm Bureau Federation, the Commodity Markets Council, the U.S. Grains Council, and the National Grange among them.

The Bush Administration completed the U.S.-Colombia FTA on Nov. 22, 2006, and after 15 months of fruitless negotiation with Democrats, sent it to Speaker Nancy Pelosi’s House, where she openly ensured its defeat on April 10, 2008.

Trade groups were dismayed, but continued to lobby for the Colombia FTA, pleading for the opportunity to advance U.S. trade and create jobs. The groups warned that while the United States sat idle, foreign trade agreements could be ratified resulting in serious losses to U.S. export markets.

“The longer we wait to approve the [Colombia] free trade agreement, the more we alienate this important ally and harm the American economy,” Moran said June 23 on the House floor.  Foreign sales are an important segment of business for Kansas agriculture, as they are to many other states.
 
Democrats continued to look the other way, and Canada’s free trade agreement with Colombia became law on June 30.  That means jobs, contracts and revenue for Canadian producers and exporters, and less of the same for the United States.

“The agreement demonstrates our government’s commitment to an ambitious free trade agenda,” Canada’s Minister of Trade Peter Van Loan said in a statement. “The agreement will benefit Canada’s producers and exporters, reduce or eliminate tariffs on nearly all current Canadian exports, and provide a more predictable, transparent and rules-based trading environment for Canadian investors.”

While Congress and the Obama Administration continue to withhold ratification of U.S. FTAs, other countries are hard at work on their own trade pacts. 

“Today, 126 trade agreements are being negotiated that exclude the United States, yet each involves current U.S. trading partners,” U.S. Wheat’s Tracy and National Association of Wheat Growers CEO Dana Peterson said in a July 6 joint statement. “If the likely fallout from the Canada-Colombia FTA is any indication, such agreements represent a grave threat to our economic recovery.”

“The most important thing now is to avoid perpetuating these losses and seeing them mushroom in the years to come by failing to implement U.S. FTAs as soon as possible,” the agricultural groups’ letter said. “The fact is, literally hundreds of FTAs are being negotiated around the world, and global trade liberalization is taking place. But it is taking place with the United States on the sidelines.”

While many observers have been unable to identify an Obama Administration trade policy, the office of the U.S. Trade Representative is at work negotiating the Trans-Pacific Partnership (TPP).  Ambassador Ron Kirk calls the TPP “a launch pad for the Obama Administration’s intention to dramatically increase American exports to the Asia-Pacific and create good jobs here at home.”

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