White House press secretary Robert Gibbs didn’t declare the Colombian accord dead earlier this month, but he came close. “I think the concerns that [President Obama] and others have are still valid around that trade agreement,” he said.
His comments, according to one press account, leave “little hope the pact will be passed shortly.”
That’s a shame, because the only concern anybody needs to have about this trade deal involves the depressing fact that Congress still hasn’t approved it.
Recently, I met a Colombian feed mill buyer. She told me that her feed mill currently pays $1 million in tariffs (extra taxes) on corn and other products from the United States–tariffs that would vanish if only Congress and the Obama administration would support the trade agreement.
“These tariffs are hurting us in Colombia and they’re hurting you in the United States,” she said. “It’s ridiculous that they’re allowed to go on.”
She’s absolutely right. Those tariff payments are keeping money out of American pockets. If they aren’t phased out, we won’t sell as much as we can to 45 million Colombians. And the Colombians, for their part, increasingly will look to Canada and other competitors for supplies.
Tariffs are taxes that don’t help anybody but special-interest groups. Their elimination through the U.S. – Free Trade Agreement, should be a high priority for Washington since tariffs on Colombian products coming into the United States are already practically non-existent. This is especially true during a time of financial crisis. Getting rid of Colombia’s tariffs won’t cure our ailing economy by itself, of course, but it certainly will help by safeguarding jobs that already exist and making possible the creation of new ones.
“All countries need to sustain a commitment to open trade and investment policies which are essential to economic growth,” said U.S. Treasury secretary Tim Geithner a couple of weeks ago.
So far, the Obama administration hasn’t exactly followed this philosophy. The stimulus bill is advertised as an economic aid, but it lurches toward protectionism with its “Buy American” requirements–rules that will make it more expensive to build the infrastructure projects that are supposed to fuel growth.
Although the White House weakened these provisions before signing the bill into law, they still remain firmly in place–and they’re a significant threat. Last week, Brazil’s foreign minister said that his country may contest the “Buy American” clause at the World Trade Organization. If we’re not careful, a global trade war could erupt.
Rather than provoking other countries into becoming adversaries, we should convince them to become partners. Colombia isn’t the only nation that’s trying to secure stronger trade ties with the United States. We have also concluded trade talks with both Panama and South Korea. As with the Colombia agreement, however, Congress hasn’t moved on these pacts, either.
I’ve just returned from a trip to Latin and Central America that included a stop in Panama, a country that I’ve visited previously. The last time I was there, the Panamanians were talking about expanding the Panama Canal so that it can accommodate larger ships. Now they’re actually doing it, with a goal of finishing their massive project by 2014.
It’s inspiring to hear them talk about their plans–and even more so to see them blast and dig their way to a brighter future. Panama is a poor country, but its leaders understand the importance of linking their economy with buyers and sellers in foreign lands. Unfortunately, while Panama pushes forward, Washington merely sits on its hands.
The challenge ahead of us isn’t to make sure that people in the United States “Buy American” through coercive, protectionist legislation. Instead, we should persuade the citizens of other countries to “Buy American” – to purchase our goods and services because of their high quality. That’s when “Buy American” works!
Much of the rest of the world–certainly the Colombians, Panamanians, and Koreans–want to trade with us. If we think their business won’t help our economy, we’re wrong.
This time next year, let’s be celebrating the passage of the U.S.-Colombia Free Trade Agreement and a successful economic future.
Tim Burrack raises corn and soybeans in partnership with his brother on their NE Iowa family farm. Tim is a Board Member of Truth About Trade and Technology