Congress Passes Controversial Free Trade Agreements

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WASHINGTON — Congress approved free trade agreements Wednesday with South Korea, Colombia and Panama, ending a four-year drought in the forming of new trade partnerships and giving the White House and Capitol Hill the opportunity to show they can work together to stimulate the economy and put people back to work.

In rapid succession, the House and Senate voted on the three trade pacts, which the administration says could boost exports by $13 billion and support tens of thousands of American jobs. None of the votes were close, despite opposition from labor groups and other critics of free trade agreements who say they result in job losses and ignore labor rights problems in the partner countries.

“We don’t do much around here that’s bipartisan these days,” said Sen. Rob Portman, R-Ohio, who was U.S. Trade Representative during the George W. Bush administration. “This is an example of where we can come together as Republicans and Democrats realizing that with 14 million Americans out of work, we need to do things to move our economy forward.”

President Barack Obama said passage of the agreements was “a major win for American workers and businesses.”

“Tonight’s vote, with bipartisan support, will significantly boost exports that bear the proud label `Made in America,’ support tens of thousands of good-paying American jobs and protect labor rights, the environment and intellectual property. … I look forward to signing these agreements.”

The agreements would lower or eliminate tariffs that American exporters face in the three countries. They also take steps to better protect intellectual property and improve access for American investors in those countries. The last free trade agreement completed was with Peru in 2007.

The House also passed and sent to Obama for his signature a bill to extend aid to workers displaced by foreign competition. Obama had demanded that the worker aid bill be part of the trade package.

Years in the making, the votes come just a day after Senate Republicans were unified in rejecting Obama’s $447 billion jobs creation initiative

The agreement with South Korea, the world’s 13th largest economy, was the biggest such deal since the North American Free Trade Agreement with Mexico and Canada in 1994.

The votes were 278-151 for South Korea, 300-129 for Panama and 262-167 for Colombia. The Senate votes were 83-15 for Korea, 77-22 for Panama and 66-33 for Colombia.

Despite the strong majorities, the debate was not without rancor.

Republicans criticized Obama for taking several years to send the agreements, all signed in the President George W. Bush administration, to Congress for final approval. Many among Obama’s core supporters, including organized labor and Democrats from areas hit hard by foreign competition, were unhappy that the White House was espousing the benefits of free trade.

Lori Wallach, director of Public Citizen’s Global Trade Watch, said the “job-killing” agreements were a “complete flip-flop for President Obama, who won crucial swing states by pledging to overhaul our flawed trade policies.”

In Cartagena, Colombian President Juan Manuel Santos said, “Today is a historic day for relations between Colombia and the United States.” He added that the agreement with his country “is going to generate much well-being for our peoples.”

But Tarsicio Mora, president of Colombia’s CUT labor federation, said Colombia’s economy was not ready to compete with the U.S.

“Our country isn’t developed, it does not have the expertise much less the requirements for trade at this level,” Mora said. “The country should be clear as to who is responsible for the coming massacre, because industry, large and small businesses are going to be hit because we are not in a condition to compete.”

Panamanian President Ricardo Martinelli said the trade agreement will help to attract foreign investment and increase commerce with the U.S., contributing to the creation of new jobs in the Central American country.

“We, Panamanians, have to prepare to take advantage of this agreement,” Martinelli said in a statement.

Panama’s Chamber of Commerce, Industries and Agriculture called it “a historic moment for Panama.”

“This is a historic moment for Panama. A treaty with the largest trading partner in the world has been ratified and this will open the doors to a very important market,” said chamber president Federico Humbert in a statement.

“We hope this agreement will bring great opportunities for Panama, while encouraging competitiveness and attract more foreign investment to our country,” Humbert said.

House Democratic leader Nancy Pelosi said that before taking up free trade agreements the House should be considering legislation passed by the Senate on Tuesday that would punish China for keeping its currency undervalued, a practice that makes its exports cheaper and contributes to China’s huge trade surplus with the United States. House GOP leaders oppose the currency bill and a Democratic attempt to attach it to the Colombia agreement was rejected.

Democratic opposition was particularly strong against the agreement with Colombia, where labor leaders long have faced the threat of violence.

“I find it deeply disturbing that the United States Congress is even considering a free trade agreement with a country that holds the world record for assassinations of trade unionists,” said Rep. Maxine Waters, D-Calif.

To address Democratic objections to the deals, the White House demanded linking the trade bills to extension of a Kennedy-era program that helps workers displaced by foreign competition with retraining and financial aid. The Senate went along; the House passed it Wednesday, 307-122.

But with the focus in both the White House and Congress on jobs, the trade agreements enjoyed wide bipartisan support.

The administration says the three deals will boost U.S. exports by $13 billion a year and that just the agreement with South Korea, America’s seventh largest trading partner, will support 70,000 American jobs.

Supporters say the three trading partners already enjoy almost duty-free access to U.S. markets and the agreements will lower tariffs on U.S. goods, making them significantly more competitive.

The U.S. Chamber of Commerce notes that U.S. farm products sold to South Korea face 54 percent tariffs, compared with 9 percent for Korean agricultural goods in the United States, and that U.S. automakers are hit with a 35 percent tariff in Colombia, compared with 2 percent for any vehicles coming from Colombia.

The administration says the trade deal with South Korea could increase exports by $10 billion, enough to eliminate the current $10 billion surplus Seoul has with the United States. It would make 95 percent of American consumer and industrial goods duty free within five years.

The vote came a day before Korean President Lee Myung-bak is to address a joint meeting of Congress. On Wednesday he said in a speech at the Chamber of Congress that the agreement would “send a powerful message to the world that the United States and South Korea stand together in rejecting protectionism and that we are open to free and fair trade.”

Republicans welcomed the prospect of increased exports but said those benefits could have come sooner if Obama had acted more quickly. They said American businesses have paid $3.8 billion in tariffs to Colombia since the trade agreement was signed, and that Americans are losing markets in South Korea because of a Korea-European Union free trade agreement that went into effect in July.

In the past year the administration has succeeded in winning concessions from South Korea to open up its markets further to U.S. vehicles and concluded an agreement to bring transparency to banking practices in Panama, known as a tax haven.

It has prodded Colombia into putting together a plan designed to protect labor rights and crack down on violence against labor leaders.

The United States has free trade relations with 17 nations. It could still take several months to work out the final formalities before the current agreements go into force. The South Korean parliament is expected to sign off on its agreement this month.

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