Time to trade
IN RECENT DAYS, it has sometimes looked as if the political logjam over trade might finally be about to break. In a State of the Union address centered on job creation, President Obama declared a National Export Initiative to double U.S. exports in five years. In support of this goal, he spoke encouragingly about "strengthening" trade relations with South Korea, Panama and Colombia -- each of which has a free-trade agreement (FTA) with the United States pending congressional approval. Could it be that the president was finally ready to take on labor unions and other Democratic interest groups that have been blocking them? The situation appeared even more hopeful on Wednesday: Treasury Secretary Timothy F. Geithner responded "absolutely" when a member of Congress asked whether the administration wanted to get them through by year's end.
Or so it seemed. Actually, the secretary had been misinterpreted because of some cross talk at the hearing, as his department quickly explained in a news release afterward. The Obama administration's position remains what it was: It wants to adjust the deals, in cooperation with Capitol Hill, and "move forward" with them, but there's no deadline. And so, despite the promising talk, the future of the FTAs remains uncertain. Panama's might still come to a vote this year, which would be good, but it is the smallest and least controversial of the three. A failure to pass the Colombia and Korea agreements would be bad news for American companies and American workers.
The administration's export initiative offers more coordinated government support to firms trying to sell overseas. But when it comes to creating export-related jobs in bunches, the crucial thing is to remove tariff barriers wherever possible and as fast as possible. While America dithers, the European Union is pursuing trade agreements with South Korea, Colombia and other nations; this threatens to leave the United States at a disadvantage.
No doubt trade is a tough sell in an election year, given the strength of its opponents on the Hill. But on Colombia, the case for a deal is especially strong -- and the case against one especially weak. "This administration will pursue trade agreements that are balanced [and] ambitious and improve market access for U.S. workers, firms, farmers and ranchers," Commerce Secretary Gary Locke said Thursday. This is a perfect description of the Colombia FTA: It would simply give the vast majority of U.S. goods the same duty-free access to that large, fast-growing Andean nation that Colombian products already enjoy in the United States. Even as it helps U.S. companies, the agreement would shore up a strong U.S. ally in a troubled region.
Since there is no economic argument against free trade with Colombia, opponents have had to come up with a political one -- namely, that the FTA would reward a government with a poor human rights record. In truth, Colombia has made vast progress since the bloody days of its past. Over the past four years, murders of trade-union members, the top concern of U.S. human rights activists, have declined from 60 per year to 28. Trade-unionists are actually six times less likely than other Colombians to be victims of homicide, according to a new study by Daniel Mejía and María Jose Uribé of the University of the Andes in Bogota.
Are opponents of the FTA clinging to their arguments despite overwhelming contrary evidence? Is free trade with Colombia in the U.S. interest? And has the president indulged protectionists in Congress long enough? To all three questions, the answer is: "Absolutely."