Deal Gets Trade Back on Track

The Obama administration’s trade agenda may finally be getting on track, now that Colombia has agreed on specific steps to strengthen labor rights in that country.

This agreement puts us “in a position to begin to have discussions with Congress on moving forward with a free-trade agreement” with Colombia, said U.S. Trade Representative Ron Kirk.

A trade deal with Panama also is getting closer, now that Panama has enacted its own labor reforms and will soon enact legislation to prevent the country from being used as a tax haven. Moving forward with the Colombian and Panama trade deals makes quick action on an already-negotiated South Korean trade deal more likely, since business groups and key members of Congress didn’t want to move forward with the Korean deal unless Colombia and Panama were submitted to Congress as well.

These trade deals are key to President Barack Obama’s goal of doubling U.S. exports in five years.

The trade agreement with Colombia is expected to boost U.S. exports to that country by more than $1 billion. The deal will eliminate Colombian duties on more than 80 percent of U.S. exports. Colombia now imposes tariffs averaging 15 percent on U.S. manufactured goods, compared with average U.S. tariffs of only 0.1 percent on Colombian manufactured goods.

The Obama administration estimates the trade deal will increase U.S. GDP by $2.5 billion and support thousands of additional jobs here.

“This should be no threat to American jobs, since the goods from Colombia already are coming into the U.S. duty-free,” Kirk said.

Business groups hailed the progress made on the Colombian trade deal. Obama and Colombian President Juan Manuel Santos “showed courage and pragmatism in striking this accord,” said Tom Donohue, president and CEO of the U.S. Chamber of Commerce.

“This proves that the United States can still lead on trade,” Donohue said.

The Retail Industry Leaders Association said Congress now should be able to approve all three trade agreements before it breaks for its August recess.

“Domestic economic growth and job creation here at home are dependent upon open access to new markets and new sources in the global economy,” said RILA president Sandy Kennedy. “Tearing down trade barriers will create thousands of new jobs as American businesses compete to buy and sell goods and services to customers around the world.”

Kirk said the Obama administration wanted to make sure the trade agreements not only boost the economy, but also reflect “our values” on how workers should be treated. Colombia has agreed to expand its protection program for union organizers and step up prosecution of crimes against union members.

Getting a trade deal with Colombia is important in maintaining the competitiveness of U.S. companies in that country, which boasts the third-largest economy in Central and South America.

“We can’t afford further delay,” Donohue said. “Other nations are racing to clinch their own trade deals with Colombia and put American workers at a competitive disadvantage.”

Not everyone is convinced this is a good deal for U.S. workers, however.

“Millions of working families have been devastated by the disastrous trade policies of the past,” said New York Representative Louise Slaughter. “Now the Obama administration is trotting out the same failed policies as if by some miracle they will have a different effect this time. They won’t.”

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Kent Hoover is the Washington bureau chief for bizjournals.