Tuesday, May 18, 2010

Inexcusable: Obama's Failure to Pass the FTAs

In President Obama's State of the Union address in January, he outlined his plan to help U.S. businesses double exports over the next five years and in the process add two million American jobs. Further, Obama warned that “If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores.”

Well, that's exactly what’s happening , but it’s not the good part about doubling exports and adding U.S. jobs, it’s the bad part about the U.S. sitting on the sidelines while Colombia and Panama negotiate free trade agreements (FTAs) with the European Union and Canada, and while Korea finalizes an FTA with the European Union. Meanwhile, America’s FTAs with Colombia, South Korea and Panama, all signed back in 2006 or 2007, are now languishing into their fourth year awaiting Congressional approval.

What makes those delays especially inexcusable is that the Colombian and Panama FTAs have support from
1,200 American companies, associations, farm and ranch groups, and chambers of commerce, as well as support from the editorial boards of almost every major U.S. newspaper including the Wall Street Journal, L.A. Times, Washington Post, Miami Herald, Chicago Tribune, Detroit News, and even the New York Times, which wrote in 2008, “We don't say it all that often, but President Bush is right: Congress should pass the Colombian free-trade agreement now. We believe that the trade pact would be good for America's economy and workers.”

Adding to the inexcusability is the fact that the main beneficiaries of the stalled free trade agreements with Colombia and Panama would actually be American companies and workers, because the agreements would open up those markets to U.S. exports by eliminating the stiff tariffs currently imposed on our products (while 90 percent of Colombian and Panamanian imports currently enter the U.S. duty-free).

And what makes the situation worse yet is that Colombia’s economy and stock market are booming like never before. After stagnating for a decade between 1993-2003, Colombian stocks have increased more than eight-fold since early 2004, and have more than doubled over the last two years (see chart above). The failure to pass the Colombian FTA means that U.S. exporters are missing out on a golden opportunity to gain from Colombia's thriving economy.

With incredible export opportunities awaiting U.S. manufacturers in booming, emerging markets like Colombia, with the huge potential to create much-needed jobs for America’s workers, and with universal support from almost every sector of the economy, what could possibly be holding up the FTAs with Panama, Colombia and Korea?

Apparently just one group: U.S. labor unions, with the support of their Democratic enablers in the White House and Congress.
Recent polls show that public support of unions is at a 72-year low, so it's especially puzzling that this one group can still exercise such political power to withhold thousands of jobs from fellow Americans by stopping the FTAs, even during and following such a severe economic downturn when job creation is so critical. Despite his political rhetoric, President Obama seems perfectly content so far to sit patiently on the sidelines along with his union supporters and watch Panama, Colombia and Korea sign free trade deals with the European Union and Canada, while preventing our FTAs with these countries from passing, and in the process watch thousands of potential U.S. jobs evaporate. It's inexcusable.

Cross-posted on the Enterprise Blog.

19 Comments:

At 5/18/2010 1:28 PM, Anonymous Anonymous said...

Obama doesn't care what the average American wants him to do. He has an agenda, a radical agenda to refashion our nation, and he's going to pursue it regardless of what the people want.

Nov 2010 is our best opportunity to prevent him from doing further damage to our country.

 
At 5/18/2010 1:44 PM, Anonymous grant said...

These so called free trade agreements are not free trade agreements at all. They are restrictive trade agreements that allow some goods free access to the signatory countries, but generally there is no difference to costs and restrictions on most traded goods.
This is not the ideal way to carry out so called free trade. Free trade is free trade not a concoction of it, but in the real world President Obama should sign them NOW!!

 
At 5/18/2010 1:45 PM, Anonymous grant said...

MP could you post one of these agreements.

 
At 5/18/2010 2:01 PM, Blogger Colin said...

OK, yeah sure, he hasn't passed any of the bilaterals. But on the other hand he did do some heavy lifting last Friday afternoon with his announcement of World Trade Week:

http://www.cato-at-liberty.org/2010/05/17/proclamation-of-world-trade-week-tops-president’s-trade-policy-achievement-list

 
At 5/18/2010 2:30 PM, Blogger Paul said...

The FTA with Colombia will never happen on Obama's watch because:

a) he's too beholden to mindless union thugs
b)the radical Left, of which Obama is a member, hates the democratically elected Colombian government. You don't have to scratch very long before you find them making excuses for FARC, or flat out supporting them.
c)Hugo Chavez hates the magnificent Uribe, and soon-to-be President Santos even more. Chavez wants a weak Colombia.

 
At 5/18/2010 3:05 PM, Blogger Paul said...

Notice the 2002 takeoff point, the year Uribe was elected, in the graph.

 
At 5/18/2010 5:37 PM, Anonymous Anonymous said...

If free trade was the goal then Colombia could create it unilaterally by removing their tariffs. We already have done so. This trade deal is unnecessary unless there is an objective other than free trade in goods.

The text of the Colombia free trade agreement is online at http://www.ustr.gov/trade-agreements/free-trade-agreements/colombia-fta/final-text

Chapter 10 Investment is one of many reasons this agreement should not be passed. This agreement is not about trade in products as advocated in Adam Smith’s Theory of Absolute Advantage and David Ricardo’s Theory of Comparative Advantage. Such trade requires no chapter on investment. This agreement is about Outsourcing of American jobs and Foreign Direct Investment of American capital in Colombia. Both of which are bad for Americans

If US trade negotiators really had the best interests of American workers in mind why is it that under the existing trade agreement with Colombia our exports to them are taxed while theirs to us are not? I suggest that the Colombian tariff reduction is just a spoon full of sugar to help the outsourcing go down. This new agreement is even worse than the old one.

Given the low wages in Colombia it is not likely we will sell them much in the way of additional goods. Tariffs on capital goods that use a lot of labor already have a low tariff.

 
At 5/18/2010 6:20 PM, Anonymous grant said...

Snapshot of Afghanistan:
Afghanistan has an economy trying to grow from decades of continuous war but the situation has improved since the removal of the Taliban government.
57 billion USD of foreign aid has flowed into the country freely since 2002.
The country is extremely poor, poverty stricken and highly depandant on foreign aid, agriculture and trade with foreign countries.
There is a shortage of housing clean water electricity medical care and jobs.
The weak uncertain government is unable to contain roaming criminals so this causes un-certainty particularly in the remote regions of the country where they have no control over the population.It makes future growth and tax collection extremely uncertain as is new jobs and elimination of corruption. [continued]

 
At 5/18/2010 6:57 PM, Anonymous grant said...

Snapshot on Afghanistan:[continued]

Industries:- [small] textiles soap furniture shoes fertilizer apparel food products beverages mineral water cement hand woven carpets natural gas copper.

Agricultural Products:- opium wheat fruits&nuts wool mutton sheep&lamb skins.

Exports:- $550 million USD.
Opium, fruit&nuts handwoven carpets,wool,cotton, hides&pelts,precious and semi precious jems. TO:-India 25%,Pakistan 20%,US 15%,Holland 8%, Tajikistan 15%.

Imports:- $5.3 billion USD.
machinery, food, textiles, petroleum&products, electricity.
Current account -$2.7 billion USD
Debt 2.7 billion USD
Gdp growth 3.4%
Gdp per capita $800 USD
Gdp composition:- agriculture 30% industry 26% [?] services 45% [?]
Domestic credit $350 mil USD
Labor force:- 15 million By occupation:-agriculture:-75%,industry 6% services 16%
unemployed 40%
Poverty 40%
Inflation 40%
Revenues $1 billion USD
Expenditure $3.3 billion USD

Can AFGHANISTAN prosper without American or others AID or long term help NO!

 
At 5/18/2010 7:33 PM, Blogger Benjamin said...

If we follow Dr. Perry's advice closly, we will have free trade with Columbia, and they will be able to export to us freely all the cocaine we want.

We can snort up profusely, and send all the money south.

Via con dios.

 
At 5/18/2010 8:39 PM, Blogger Milton Recht said...

To add to the idiocy of the administration's support of the anti-free trade, union position is that private sector union membership in manufacturing and construction is only 7.2 percent, a decline from the 35 percent peak in the 1950s.

State, local and federal government workers make up the majority, 52 percent, of union members. 43 percent of local government workers are union members.

So it is basically the teachers, the firemen, the policemen, the garbage man and other local community workers who live off everyone's tax dollars, have generous pensions, health benefits, vacation and sick days and who have not felt the effects of the recession and layoffs anywhere near the same extent as the private sector.

People who do not make anything, who do not compete in international markets, who need not worry about international trade and competition, and who do not have to worry about private sector job creation are the ones stopping the US economy from expanding, adding private sector jobs and from benefiting from free trade agreements.

 
At 5/18/2010 10:40 PM, Anonymous grant said...

ANON: 5:37PM.
OK!b Given!!!but wages are lower in 2nd or 3rd world countries. They don't have the off the shelf trained ready workforce America has. Wage earnings rates are now now 40% lower in foreign countries because the $USD has devalued by that much. So things have changed since the agreement was signed so it should now be revisited and reassessed taking into account the actual conditions that apply now. Unions should have no say in the negotiations or outcome. It is a government decision not a union one.
You are not going to like me saying this but America is a bankrupt state and should persue every avenue it can to gain jobs particularly where it can earn export income for the country. Why is China so sucessful---Because it
EXPORTS--EXPORTS--EXPORTS---EXPORTS

 
At 5/18/2010 10:46 PM, Anonymous Anonymous said...

Damn this evil administration! To think that Obama has been sitting on this for the last four years... makes me real sad. When was that inauguration again? ;)

"Meanwhile, America’s FTAs with Colombia, South Korea and Panama, all signed back in 2006 or 2007, are now languishing into their fourth year awaiting Congressional approval."

 
At 5/18/2010 11:06 PM, Anonymous grant said...

Anon: 10.46pm
IT'S good to see your posting.
I read a story recently that the grea GE [general electric] was negiotating with a Chinese company that is building fast trains in China to use their technology under liscence to build the same trains in America for Obamas fast train program. CAN YOU BELIEVE THAT? ONE OF THE WORLDS GREAT INNOVATING COMPANIES GETTING TECHNOLOGY FROM YESTERDAYS COMMUNIST FAILED STATE COOLIES.

 
At 5/19/2010 6:11 AM, Blogger Paul said...

"Damn this evil administration! To think that Obama has been sitting on this for the last four years... makes me real sad. When was that inauguration again? ;)"

Pelosi,a pal of the FARC friendly Piedad Cordoba, has been Speaker since the Democrats won Congress in '06. She kept it bottled up during the Bush years.

 
At 5/19/2010 6:12 AM, Blogger Paul said...

"This agreement is about Outsourcing of American jobs and Foreign Direct Investment of American capital in Colombia. Both of which are bad for Americans."

We already have free trade agreements with Mexico, and the entirety of Central America. If outsourcing was the problem you say it is, it would be game over by now.

The only real outsourcing threat is Mexico outsourcing their poverty to the United States via illegal immigration.

 
At 5/19/2010 10:19 AM, Blogger juandos said...

What made anyone think that Obama had even the remotest interest in free trade?

I mean it wasn't like Obama didn't already tell us he's a commie or a socialist...

 
At 5/19/2010 10:53 AM, Blogger Ron H. said...

>"I mean it wasn't like Obama didn't already tell us he's a commie or a socialist..."

Obama was always been pretty clear about who he is, and what his politics are. His background, his books, who his friends are, and the many things he has said, such as in this radio interview, leave little room for doubt.

It amazes me that enough people seem OK with this, to have elected him POTUS!!

Now, since election, his every act, and the many radical people he has surrounded himself with, tell the same story. The only difference is that he no longer talks the talk. we now hear only meaningless drivel.

 
At 11/29/2010 10:44 PM, Blogger tapsearcher said...

Free Trade now has a long history of failures as our economy based on making money on money instead of making things is burning out. Free Trade is primarily based on moving production from place to place for the sake of cheaper labor markets. The real commodities are workers who are put on a world trading block to compete with each other for the same job. Governments act as brokers in the process with workers having no voice in the matter. See http://squid.me/R http://squid.me/9
No sense in trying to resolve our economic crisis if we ignore local value added economies as the core of the free enterprise system. Search under Ray Tapajna blogspot for more articles.

 

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