Fausta's Blog

After more than six years being held up by the Senate Democrats, the Colombia FTA has been approved by the House:
House approves South Korea, Panama, Colombia trade deals

In a long-awaited move, the House on Wednesday approved three trade deals with South Korea, Panama and Colombia, as well as the renewal of an aid program for workers who have lost their jobs because of outsourcing, sending the pacts to the Senate for final approval Wednesday evening.

The three trade deals, which would boost U.S. exports by $13 billion, were originally negotiated by the Bush administration but have been stalled for years as the parties wrangled over renewing the Trade Adjustment Assistance program, as well as over anti-union violence in Colombia.

It was about time.

Now that the Canada-Colombia Free Trade Agreement is law, US wheat growers are feeling the pinch (emphasis added; h/t Instapundit),

On Monday, the Colombia-Canada Free Trade Agreement (FTA) entered into force. It is an agreement first signed on Nov. 21, 2008, nearly two years to the day after a U.S.-Colombia FTA was signed. Now most Canadian industries enjoy duty-free access to the growing Colombian market. In contrast, because our government has allowed our FTA to languish, Colombian importers must still pay tariffs on most U.S. goods. For wheat, that tariff overcomes the natural advantage U.S. exporters otherwise have in providing quality wheat on a timely basis to our valued Colombian customers.

The stakes are particularly high for U.S. farmers as roughly 50 percent of U.S. wheat and 25 percent of all U.S. agricultural production is exported. In 2010/11, the United States exported more than 35 million metric tons (MT) of wheat — roughly 60 percent of last year’s production — to about 70 countries. The United States is the largest supplier of wheat to the world and these exports provide worldwide customers with a competitive wheat source while returning an economic boost to the U.S. economy.

The U.S. wheat industry has worked hard to build a reputation as a reliable supplier. While American farms are largely family-run operations, they are businesses that understand the importance of trade to their customers. The U.S. wheat industry has a long history of promoting fair and open trade and looks forward to implementing pending and future trade agreements such as the nine-country TransPacific Partnership agreement to maintain its competitiveness in world markets. We can only hope that our customers in Colombia, as well as in South Korea and Panama*, understand this situation for what it is: a domestic political struggle that accomplishes only confusion, frustration and diminished trust.

U.S. wheat farmers will not give up on trade and once more call for the immediate ratification and implementation of the U.S.-Colombia FTA so U.S. producers and our Colombian customers can benefit from bilateral trade conducted on a level playing field.

Last week President Obama decried that the FTAs with South Korea, Panama and Colombia had not been passed by Congress. Well, where are they?

On his desk:

On his three-state tour in the Midwest this week, Mr. Obama repeatedly told audiences that the Korea, Colombia and Panama free-trade deals would all be law by now if not for an obstructionist Congress. Passing the deals is something Congress “could do right now,” he said.

Except that’s not true. Congress can’t pass the agreements “right now” because it doesn’t have them. They are still sitting on the President’s desk. Seriously.

If you are surprised to learn this, you are not alone. White House deputy press secretary Josh Earnest only learned the news on Friday during a press conference. Asked why the FTAs haven’t been sent, he responded, “We have not sent them over?”

That was followed by what might be called an awkward moment. “I will say this—I mean, there has been an active dialogue that’s been underway between the United States trade representative, other members of the Administration, with the appropriate Congressional leaders in the committees of jurisdiction. We are in a place where we have seen Republicans advocating for passing these free trade agreements for quite some time,” Mr. Earnest explained. He also pointed out that “these three trade agreements combined would create or support about 70,000 jobs here in the U.S.”

A reporter persisted and asked, “Well, when are you going to send them over?” “But I can tell you that there’s no reason—I mean, there’s agreement here about the benefits of these trade agreements getting through the Congress, both here at the White House and Democrats and Republicans on Capitol Hill. Mr. Earnest referred reporters to “Congress or the USTR on the legislative mechanics of this,” adding that “there is bipartisan agreement on this and it’s something that we should move on really quick.”

I have been writing about the Colombia FTA for nearly five years and thought I had heard it all, but this one takes the cake.

We’re in the best hands.

Sean Hackbarth of the US Chamber of Commerce posts that

Today, the Free Trade Agreement (FTA) between Canada and Colombia went into effect. Canadian workers and businesses get to reap the benefits of lower duties and expanded trade, while Americans wait for Washington to act on the pending FTAs with Colombia, South Korea, and Panama.

As I have pointed out in the past,

The Democrats in Congress had been holding up final approval of the Free Trade Agreement with Colombia for years, lacking support of their Big Labor constituents, particularly the United Auto Workers.

With Colombia, it’s Americans who are having to pay export fees and duties, while the US is losing market share to other countries – Canada included, now.

Back to Sean,

not passing the Colombia FTA hurts American companies and workers. According to U.S. Wheat Associates, “the United States could lose $100 million in wheat sales each year as a result of our tariff disadvantage.” And staff from the House Ways and Means committee point out that “in the past two years, U.S. farmers and ranchers have lost more than $1 billion in sales to Colombia.”

And so we wait.

UPDATE,
Outsourcing Jobs, Union-Style

Taking longer, for all the wrong reasons, the final approval of the free trade agreement with Colombia is now on a new treadmill, in time for President Santos’s meeting with President Obama,
Colombia Pact Clears Path for Other Trade Agreements

The Obama administration unveiled a revised free-trade pact with Colombia that boosts the chances for congressional passage of three trade-opening agreements that have languished for more than four years.

The deal requires Colombia to stiffen its laws to provide greater protection of Colombian labor organizers and up to five years’ imprisonment for those who disrupt or threaten union organizing or activities. By satisfying at least some Democrats concerned about Bogota’s history of violence against union leaders, the deal sets the stage for action on trade pacts with South Korea and Panama, senior administration officials said.

Colombian President Juan Manuel Santos, who is in the U.S., is expected to meet Thursday with President Barack Obama and sign off on the revised trade pact.

Republican leaders propose to move the three trade pacts in a similar time frame, if not together. To retain Democratic support needed to pass the agreements, lawmakers say they must also renew a Trade Adjustment Assistance program for workers who are displaced as a result of trade agreements.

Key to ensuring Colombia keeps its part of the bargain is renewal of an Andean Trade Preferences program providing favorable tariff treatment to imports from Colombia and other Latin American nations linked to the narcotics trade, in order to foster alternative industries.

Republicans helped drive the administration’s effort to revamp the Colombia agreement by linking action on the much larger Korea pact to movement on the smaller Latin American deals. U.S. Trade Representative Ron Kirk early this year accelerated an effort with the Colombian government to revise the trade pact to draw enough Democratic support to move the deal forward.

Rep. Dave Camp (R., Mich.), chairman of the House Ways and Means Committee, which has jurisdiction over trade pacts in the House, urged the administration to begin drafting the first stage of the legislation, “so that Congress can consider all three of our pending trade agreements by July 1.”

Trade pacts between the European Union and Korea, and between Colombia and Canada, take effect July 1, potentially limiting the positive impact of the U.S. pacts on U.S. exporters.

Aides to Mr. Camp said congressional leaders and the White House had yet to agree on when, and in what order, they would consider the three agreements.

Here’s the glitch:

Administration officials said they didn’t expect the revised pact to satisfy labor unions, or many of their congressional allies.

In a perfect world, the FTA with Colombia will prevail.

Since it’s not a perfect world, I’m not holding my breath.

Interestingly, the Colombians are extraditing Walid “The Turk” Makled – a suspected drug trafficker who in his heyday was said to smuggle 10 tons of cocaine a month into the U.S. – to Venezuela and not the USA:

Observers say Mr. Santos’ plans to send Mr. Makled to Venezuela make sense because Colombia wants to continue improving relations with the Venezuelan government after trade and diplomatic relations soured under former Colombian leader Alvaro Uribe. Venezuela is an important trading partner with Colombia.

One good trade leads to another, indeed.

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MUST-READ:
Trade agreements are about fairness; they are not a “Zero-sum game”, do not weaken the economy, do not drive trade deficits. Not convinced? Read this:
Misconceptions About Trade Agreements

The WaPo’s headline has it,
In Brazil, Obama will ask what S. American economy can do for U.S.

When top American officials have visited Brazil in the past, they often have asked what the United States can do to help Brazil’s economy, which has been buffetted by periodic financial crises.

But when President Obama visits this weekend, he’ll be asking what Brazil can do for the U.S. economy.

White House officials said Tuesday that Obama’s trip this weekend — the centerpiece of which will be a series of economic talks in Brazil — would focus on ways that rapid growth in Latin America’s largest economy can pay off for U.S. businesses.

“This trip fundamentally is about the U.S. recovery, U.S. exports and the critical relationship that Latin America plays in our economic future and jobs here in the United States,” said Michael Froman, national security adviser for international economic affairs.

Let’s hope the administration at least attempts to couch that in better terms, because you can bet the Brazilians are focused on what’s in their national interest, and give a rat’s patootie about the US’s.

The trip’s supposed to be about trade,

President Obama will be heading to the region at a time of growing trade between U.S. and Central and South America. U.S. exports to the region grew 86% between 2004 and 2009 and are on track to double in the next five years, the White House said. Exports to the region are estimated at about $161 billion in 2010, supporting nearly 900,000 U.S. jobs, the White House said.

Obama’s scrupulously avoiding Colombia and Peru, two countries which have been waiting and waiting for their own Free Trade Agreements to be finalized

Brazil is the first stop on the trip, which will include a visit with the country’s new president, Dilma Rousseff. He will also be visiting El Salvador and Chile.

I can’t wait to see if former Marxist Dilma will be lecturing Obama on free trade and business, and against protectionism, as Lula did almost exactly two years ago during Lula’s White House visit.

Oil and tech are on the table, but other trade is unlikely to change,

In a nutshell, Brazil wants greater access for its ethanol and other commodities, and fewer U.S. subsidies in cotton and agriculture generally. On the other side, the United States is pushing for more access for its consumer goods in Brazil.

Preliminary talks, including a meeting between U.S. Secretary of State Hillary Clinton and Brazilian Foreign Minister Antonio Patriota in Washington earlier in March, have convinced both sides to expect scant, if any, progress.

Brazil says it cannot offer greater access to its consumer market, in part because its industries are suffering due to a strong currency and a wave of cheap imports from China..

Andres Oppenheimer is predicting a honeymoon, but my prediction is that they’ll punt on the trade issues, after the photo ops are done.

Maybe Obama will get Dilma to toss a football, just like Prime Minister Julia Gillard of Australia,

Dilma, however may insist on kicking a soccer ball. We shall see.

Security will be tight while the Obama family takes in the sights in Rio and possibly a stop at the beach. No word if Obama will meet with the Brazilian politician who changed his name to Barack Obama trying to get elected.

Cross-posted at Real Clear World

Senate GOP Letter To Majority Leader Reid On Trade Agreements With Colombia And Panama

As a result of the administration’s failure to act on these agreements, American companies and their workers are losing market share and are being denied valuable business opportunities. At the same time, Colombia and Panama are continuing to expand their trading partnerships elsewhere, signing bilateral free trade agreements with the European Union, Canada, and other countries which are eager to move into these large markets at the expense of U.S. workers.

Any further delay of these agreements is unnecessary and inexcusable. So important are these deals to our economy and our relations with these key allies in Latin America that, until the President submits both agreements to Congress for approval and commits to signing implementing legislation into law, we will use all the tools at our disposal to force action, including withholding support for any nominee for Commerce Secretary and any trade-related nominees.

It’s not only the Republicans. As I stated last week, Democrats and Republicans are urging Obama to pass the FTAs, including,

19 former government officials, Democrat and Republican, sent Mr. Obama and Congressional leaders a letter urging swift passage of the Colombia and Panama deals. The 19 served under no fewer than six U.S. Presidents, from Gerald Ford through George W. Bush.

The signatories include two former special envoys to the Americas; six former U.S. Trade Representatives, including Democrats Mickey Kantor and Charlene Barshefsky; and 11 former Assistant Secretaries of State for the Western Hemisphere, including Bernard Aronson and several other Democrats.

What is Obama waiting for?

The Democrats in Congress had been holding up final approval of the Free Trade Agreement with Colombia for years, lacking support of their Big Labor constituents, particularly the United Auto Workers. The FTA with Korea passed becauseKorea’s pact got the imprimatur of one labor union, the United Auto Workers, while Panama’s and Colombia’s pacts did not.

in spite of the fact that

the agreements cost nothing, will add some $12 billion in goods and services to the U.S. economy and are job-creating machines

Allow me to remind you that, particularly with Colombia, it’s Americans who are having to pay export fees and duties, while the US is losing market share to other countries.

Now the FTAs are getting more support,

Republican, sent Mr. Obama and Congressional leaders a letter urging swift passage of the Colombia and Panama deals. The 19 served under no fewer than six U.S. Presidents, from Gerald Ford through George W. Bush.

The signatories include two former special envoys to the Americas; six former U.S. Trade Representatives, including Democrats Mickey Kantor and Charlene Barshefsky; and 11 former Assistant Secretaries of State for the Western Hemisphere, including Bernard Aronson and several other Democrats.
…
The letter explains the clear American economic self-interest in approving the pacts. In the five years prior to 2008, U.S. exports of major grain products to Colombia grew by 38% a year, worth nearly $4 billion. Since 2008, while the U.S. failed to approve its bilateral pact, Colombia has moved on deals with Canada, Chile, the EU, Brazil, Argentina and other farm product competitors of the U.S.

One result is that U.S. farm exports to Colombia fell 48% between 2008 and 2009, and another 45% in 2010. Exports of corn, wheat and soybeans fell by 68%. The bipartisan letter estimates nearly $700 million in lost U.S. exports in those farm products alone.

What did Obama do? Nothing. The White House ignored the letter.

Yesterday

The Democratic and Republican leaders of the Senate Finance Committee said Wednesday they would withhold approval of another trade agreement - a pact with South Korea that Obama recently completed – unless it is packaged with a Colombiadeal and a third, less controversial one being negotiated with Panama.

Today a Colombian delegation is holding talks with administration officials, who remain beholden to the UAW.

Let’s hope the Senate Finance Committee members prevail.

UPDATE
Big Unions, Big Money,

Colombia, America’s strongest ally in the hemisphere, needs the Free Trade Agreement with the US finalized. The agreement will end tariffs paid by US producers selling to Colombia, and will also send a message of support to the anti-Chavista forces in the region.

This week Colombian President Álvaro Uribe is visiting Pres. Obama. Uribe of course brought up the subject, only to be served a waffle:

U.S. President Barack Obama expressed hope that Congress would eventually approve a long-delayed free trade agreement with Colombia, but said that country needed to make more progress on human rights first.

“There remains work to do. But I’m confident that ultimately we can strike a deal that is good for the people and good for the people of the United States,” Obama told reporters after a meeting with Colombian President Alvaro Uribe.

In remarks in the White House Oval Office, Obama said he did not have “a strict timetable” for submitting the trade deal to Congress because he already had a busy legislative agenda this year and needed to consult with lawmakers first.

The Wall Street Journal struck an optimistic note: “Obama Is Optimistic About U.S., Colombia Free Trade Deal”, which reminds me of the old line “I’ll call you tomorrow”, but Drudge was less kind than I, calling Obama’s reaction “the evil eye.”

You don’t expect the FTAs with Peru and South Korea are going to be finalized any time soon, do you?

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In today’s podcast at 11 AM Eastern, I’ll talk about about Cristina Fernandez‘s losses in last Sunday’s Argentinian Congressional election.

Post corrected for a major typo