It seems that America’s economic competitors have learned a thing or two from the Wizard of Menlo Park: Instead of waiting for the United States to continue its traditional practice of expanding global trade, they’re hustling to adopt new free-trade agreements on their own.
The risk is that while the rest of the world pushes to remove barriers to trade, Americans will ignore attractive opportunities. It’s the economic equivalent of preferring a candle to a lamp.
South Korea is a case in point. Last month, American and Korean negotiators completed a trade pact that would benefit both countries enormously. Farmers in the United States would receive an especially big boost: More than half of our $1.6 billion in exports to that growing nation immediately would become duty free.
Yet this promising agreement is now stuck in legislative limbo. Before it becomes a reality, the deal must win approval from Congress, as do the trade agreements with Columbia, Peru and Panama.
Congress would be wise to sign off on these deals and then extend TPA beyond its current June 30, 2007 deadline. They should approve these four agreements now because each one makes economic sense for the United States, and then give TPA a new lease on life or better yet, make it permanent so that we can continue to negotiate more pacts with other trading partners that open markets for our products around the world.
South Korea certainly isn’t waiting for the United States to make up its mind. Instead, it’s hustling to finish trade agreements with other countries that would love to do business with it. News reports indicate that South Korea is on the verge of concluding a deal with Canada. Moreover, South Korea just completed a first round of talks with the European Union.
If the United States dawdles on the Korean FTA, our competitors in Canada and the EU will benefit. We have an advantage over them right now in that we’ve actually finished our trade talks. All that remains is to give them congressional approval. Delays will only help foreign farmers and business owners, who will swoop in and grab market share that would go to Americans.
Yet some members of Congress are trying to make the problem worse by throwing up new roadblocks to trade. Senator Sherrod Brown of Ohio, for instance, has just introduced a bill that would require the administration to report on the national-security implications of trade legislation.
The good news is that the national-security implications of trade legislation are almost always good. Trading partners find that it’s easy to become diplomatic collaborators. More trade with South Korea would mean closer ties to a nation that is an important regional ally against North Korea and China. More trade with Colombia, Peru, and Panama would give the United States added leverage in Latin America and balance the destabilizing influence of Venezuelan strongman Hugo Chavez.
The bad news is that Brown is one of Washington’s leading economic isolationists. The goal of his bill isn’t to create a new argument in favor of free-trade agreements, but rather to identify talking points that might be used against them. For every free-trade agreement that goes before Congress, he would like to scuttle it with a provocative issue such as last year’s much-hyped, but mostly phony, controversy over port security.
Turning out the lights on free trade is a dim notion. Bilateral agreements with South Korea and other nations are worthwhile in their own right, and they’ll take on added importance if the World Trade Organization’s Doha round continues to flicker.
It doesn’t take an Edison to know that pulling the plug on them just isn’t a very bright idea.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology.