Sunday, August 21, 2011

More on the Failure to Pass the FTAs

Thanks to its thriving mining industry, Colombia is the sixth-largest market in the world for Caterpillar, one of the many U.S. companies hoping that the long-delayed FTA with Colombia finally passes.
From a July 27 article in the Washington Diplomat:

"Slowly but surely, Americans have realized that delaying the FTA is destroying jobs in America," insisted Gabriel Silva, Colombia's ambassador to the U.S. Noting that Colombia must import 70 percent of its corn and 95 percent of its wheat due to limited domestic production, he pointed out that "in 2008, U.S. farmers were the largest providers of agricultural products to Colombia. The U.S. had 46 percent of the Colombian food import market. That's since fallen to 20 percent."

"We were not going to wait for the U.S., so we've signed free trade agreements with Mercosur, Chile and Mexico," he added, referring to the Mercosur trade bloc comprising Argentina, Brazil, Uruguay and Paraguay. "We've renegotiated an agreement with Canada, and also one with the European Union. These countries compete head-to-head with American farmers, in particular Brazil and Argentina."

That is why Bob Stallman, president of the American Farm Bureau Federation, is so gung-ho about passing the U.S-Colombia FTA — now.

"Time is of the essence," he said. "It's important that Congress acts quickly to vote on the package by August recess. If not, we stand to lose this opening and it will come at a cost to America's farmers and ranchers. After more than four years, we cannot afford to miss this opportunity."

Doug Wolf, president of the National Pork Producers Council, agrees, saying it's imperative that the deal is approved before Congress adjourns for a month. "U.S. pork producers need new and expanded market access to remain competitive in the global marketplace," he said. "And the way to get that is through free trade agreements."

MP: Obviously, Congress adjourned in August without signing the FTAs.

So Congress and Obama talk all the time about increasing the number of U.S. jobs and lowering the unemployment rate, but their joint failure to pass the FTAs demonstrates that they really aren't serious about jobs.  Maybe maintaining the support of U.S. organized labor is more important politically than creating thousands of new jobs for Americans.

After all, by not passing the FTAs, politicians maintain union support but don't lose any political support because unemployed workers around the country aren't even aware that their lack of employment might be due to Congressional and presidential inaction on the FTAs.  If they pass the FTAs, elected officials lose union support, but don't gain any new political support because newly hired workers in U.S. industries exporting to Colombia and Panama may not even realize that their employment came about because of FTA passage.  And the thousands of newly created jobs from FTA passage would be dispersed throughout the economy in many industries, and those new workers, unlike organized labor, are not unified and organized as a powerful political block.  So politically, there is probably no net benefit from passing the FTAs, and a very likely net loss politically, especially for Obama and Democrats in Congress. 

Bottom Line: The failure to pass the FTAs has nothing to do with economics, logic, common sense, creating jobs, or what's best for the country as a whole, and everything to do with good ol' politics.

9 Comments:

At 8/21/2011 11:09 PM, Blogger Paul said...

It' a no-brainer, but the Left vehemently hates the Colombian government as much as they love Hugo Chavez. In his heart, Obama is one of them.

 
At 8/21/2011 11:37 PM, Blogger Benjamin said...

Why all the enthusiasm fro Cocainelumbia? Are they splashing PR money around DC?

 
At 8/22/2011 7:12 AM, OpenID sethstorm said...

Then make it a condition that if it passes, that:

1) It cannot be used to send work over there to those countries, as with prior (NAFTA, CAFTA, China PNTR) treaties. No way, no how.

2) Jobs are created here that make use of the people that we have now. No complaints of people being out of work too long or having a perceived skill mismatch.



If the trade treaty is that good, then it should be no problem to meet those conditions.

 
At 8/22/2011 7:34 AM, Blogger juandos said...

From and obvious 'Miami Vice' in reruns watcher...

Gosh pseudo benny! Thanks for yet another enlightening comment...

You've proved yet again that your grasp on the basics is tenuous as is your grasp on reality...

 
At 8/22/2011 8:10 AM, Blogger Paul said...

Benji, once again weighing in with his thoughts about a country he can't even spell correctly.

Benji, even your human wrecking ball of a boyfriend admits the Colombian FTA will create jobs in the US. He even pretends to be for it because the facts are so unassailable. That's why there is enthusiasm for passage.

 
At 8/22/2011 8:18 AM, Blogger morganovich said...

bunny-

columbia has been one of the best turn around stories in recent memory.

the disavowed socialism and went free market by drafting a new, rights based constitution.

tariffs were reduced/eliminated, finance deregulated, and SOE's privatized.

they have had the #1 performing stock market in the world over the last decade.

they are a textbook example of how free trade and economic liberalization works just as venezeula is a textbook example of how aggressive socialism and central control can destroy prosperity.

1. free trade with them (or anyone) benefits us.

2. this is exactly the sort of regime we want to support in south america. (stable, prosperous, open)

why do they need to be "splashing money around"? this is a no brainer.

 
At 8/22/2011 8:22 AM, Blogger morganovich said...

seth-

your "condition" is absurd.

the whole point of free trade is to shift labor based on comparative advantage.

read your ricardo.

jobs will shift in both cases, but ultimately, there will be more real production and consumption and employment.

both sides benefit.

your "no jobs can shift" proposition is as impossible as it is counterproductive.

i could put a tax on shoes in the US of $1000 a pair. this would makes them so expensive that you would likely make your own.

if i removed it, you'd be better off, even thought the shoe making job shifted.

you are advocating only allowing the shoe tax to be lifted if no shoemakers get the jobs.

that's ridiculous.

 
At 8/22/2011 9:27 AM, Blogger Tom said...

Democrats have no intention of helping US employment or prosperity. They only help unions, big government and socialism. They are riding that agenda right off the cliff. Since FDR in 1944, only one Democrat president has been re-elected (Bill Clinton, who had Gingrich to repair the economy for him). Like Europe, US governments are vastly oversized, greedy and wasteful. The big government model is as successful as the Soviet Union.

 
At 8/22/2011 5:21 PM, Blogger VangelV said...

Why all the enthusiasm fro Cocainelumbia? Are they splashing PR money around DC?

Columbia has made great strides over the past decade. The country is much safer and friendly to business. People are getting richer because the natural resources that it produces are selling for great prices. The country is booming and is doing a lot better now than the US, which is busy fighting a war on its domestic businesses and involved in five or six conflicts abroad.

The fact is that the US would benefit from signing as many free trade agreements as possible.

 

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