By Antonio O. Garza
The long-pending free-trade agreements with Colombia, Panama and South Korea may finally appear this month before Congress for approval. But few things in Washington are certain, so free trade advocates are advised to take nothing for granted.
These three bilateral FTA’s were negotiated and signed by President George W. Bush. They have faced a long period of legislative inaction, in part because of legitimate economic and political concerns now rectified, but also because of political gamesmanship.
The recent fight over the deficit and debt ceiling has left many observers with severely lowered expectations for this Congress, including diminished hopes for the return of liberalized trade as a centerpiece of the country’s economic agenda. But some optimism was rekindled in August when Senate and House leaders announced they had found a ‘path forward’ for the FTAs and would take them up after their summer recess.
Now it’s a matter of the administration and Congressional leaders following through with the kind of bipartisan effort trade liberalization measures have invariably required.
The rationale for supporting these agreements has always been strong, but in a down economy alongside the kinds of power shifts underway in the world — and in our hemisphere — approving the FTAs is more critical.
• First, they will benefit the United States economically by boosting exports, generating jobs and enhancing our global competitiveness. Exports have been one of the few bright spots in our economy the last few years. According to one analysis, the export sector contributed 44 percent to the growth of the U.S. economy in 2010. Two-thirds of U.S. exports last year came from the manufacturing sector, which generally pays better wages and generates more jobs. Estimates are the three agreements will increase the size of the U.S. economy by $15 billion thanks to the removal of tariff and non-tariff barriers.
• Second, without these agreements, the U.S. risks the loss of market share and access to two regions critical to our short- and long-term economic interests. And make no mistake, other global competitors are not hesitating to step into the void our inaction on FTAs created. Witness the Canada-Colombia free trade deal in August, leaving U.S. exporters, particularly those in the agricultural sector, at a competitive disadvantage and putting downward pressure on U.S. market share. Consider on July 1, European Union and South Korea entered into an FTA. In one month, Europe’s exports to Korea increased 34 percent.
• Third, the agreements are important to U.S. geopolitical interests and offer an opportunity to reassert our strategic interests in Latin America and in the Asia-Pacific region. Through the FTAs, we affirm our commitment to partnership and signal that we intend to remain fully engaged, economically and otherwise, in regions we deem important to our national interests.
These FTA’s are not only good for business and creating jobs, they help strengthen ties we have with important allies and aid in cultivating more democratic institutions and market-based economies at the precise moment that some influences (such as that of Venezuela’s Hugo Chavez) may be ebbing, and others (such as China’s) may be poised to flow in. Summer’s nearly over, it’s time for Congress to act.
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Antonio O. Garza is the former U.S. ambassador to Mexico and is counsel in the Mexico City office of White & Case and a partner in ViaNovo, a U.S.-based public affairs consultancy. He is online at www.tonygarza.com.
