Monday, August 15, 2011

Congratulations, Canadian Exporters!

Last month, we congratulated EU and Korean exporters and consumers on the entry into force of the Korea-EU FTA.  And, much to the dismay of the US exporters and consumers who have been patiently waiting on the Obama administration and congressional Democrats to finally move the Korea-US FTA, the KOREU has already produced some eye-popping benefits.

Now, it's time for us to congratulate the lucky consumers and exporters in Canada and Colombia, as their bilateral trade agreement entered into force today.  Meanwhile, the US-Colombia FTA collects dust in the same Oval Office drawer as the KORUS:
“I’ve got a flag on my lapel, not a maple leaf,” U.S. Trade Representative Ron Kirk exclaimed at a Senate Finance Committee hearing in March. Today, as Canada’s free-trade agreement (FTA) with Colombia enters into force, it is the maple leaf that represents competitive pressures on U.S. market share and the political influence that goes with it.

Canada and Colombia are two of our closest friends in the Western Hemisphere, and their strengthened commercial ties clearly benefit their mutual interests as well as Washington’s broader goal of promoting open markets and economic development. Yet U.S. businesses and their congressional advocates are keenly aware that Canada has beat us to the punch, leaving U.S. exporters to an important emerging market at a competitive disadvantage.

The implications of delayed ratification of the U.S.-Colombia FTA are not lost on either Colombia or Canada. As Colombian President Juan Manuel Santos bluntly put it in a recent interview with Americas Quarterly, “American products are being replaced in the Colombian market because other countries have free-trade agreements. If the FTA is not approved shortly, the U.S. will continue losing market share.” Those losses will be particularly acute in the agricultural sector, where duty-free Canadian wheat will likely replace U.S. imports.

Similarly, on a visit to Bogotá last week, Canadian Prime Minister Stephen Harper lauded the leveling of the playing field for Canadian business vis-à-vis competitors who have or are seeking preferential access to the burgeoning Colombian economy. For Canadian wheat exporters, for example, this will mean the opportunity to catch up with Argentina, which has surpassed the United States as Colombia’s number one agricultural supplier. Tellingly, the president of the Canadian Wheat Board noted that the U.S. has yet to ratify its own agreement as he welcomed the competitive edge gained by Canadian grain exporters.

For both Ottawa and Bogotá, a strengthened trade relationship is also geopolitically attractive. As Harper stated on his official visit to Colombia, “diversifying trade and economic activity like this is the focal point of Canada’s renewed outreach to its hemispheric neighbors.” As in the United States, securing parliamentary approval of the FTA with Colombia was not an easy lift, given domestic opposition from labor unions and human rights groups. Nevertheless, the trade agreement was viewed an important tool in a comprehensive strategy to engage with Latin America.
House Ways & Means Chair Dave Camp (R- and Trade Subcommittee Chair Kevin Brady (R-TX) issued an unequivocal press release calling for the Congress to act "immediately by passing all three of our trade agreements before we lose any more jobs" and "stand[ing] ready to do so as soon as the President submits them to Congress."  Meanwhile, Senate Finance Chair Max Baucus (D-MT) issued an, ahem, interesting statement of his own (emphasis mine):
Canada’s trade agreement with Colombia gives our competitors a leg up and shows the importance of coming together quickly to pass America’s pending trade agreements and Trade Adjustment Assistance.  Every day our trade deal with Colombia languishes is a day U.S. ranchers and farmers can fall behind in this lucrative market, which is why we've been fighting so hard to pass the Colombia Free Trade Agreement. Approving our trade agreements with Colombia, Panama and Korea in tandem with Trade Adjustment Assistance will increase exports by $13 billion for ranchers, farmers and businesses in Montana and across the country and create jobs here at home – and that’s why we cannot afford further delay. As we open new markets for American goods with these free trade agreements, this package ensures we are fulfilling our duty to help provide U.S. workers the resources they need to succeed. Working together to enact this package into law needs to be a top priority when we return in September to help create the jobs and economic opportunities American ranchers, farmers and workers need to prosper in this global economy.
That's right, folks.  The US-Colombia FTA is such a "top priority" for the White House, Sen. Baucus and his fellow congressional Dems that they refuse to move the deal (and the Korea and Panama FTAs) unless it's done "in tandem" with TAA expansion.  And we "cannot afford further delay" - except to wait for a vote on expanded TAA, of course.  And how exactly does TAA expansion "increase exports by $13 billion for ranchers, farmers and businesses in Montana and across the country and create jobs here at home"?  Oh, that's right, it doesn't.  TAA expansion is just the $1B ransom we apparently have to pay in order to get the FTAs' economic benefits.

But other than that, Sen. Baucus has been "fighting hard" to pass the agreements, and he's ready to roll in September, baby!

(Unless congressional Republicans refuse to pass the TAA expansion, of course.)

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