Time for Teamwork on Trade

September 23rd, 2011



This piece was originally posted by The Wall Street Journal.

Last December, in an NFL game between the Tennessee Titans and the Houston Texans, two Houston teammates were involved in an on-field brawl – with each other. While the Texans fought, the Titans scored and, not surprisingly, won the game 31-17.

Washington has been doing much the same with pending trade deals with South Korea, Colombia and Panama. While the many supporters of these trade deals have been battling and bickering, America’s international competitors have been running up the score – and America’s companies and workers are losing out.

The Obama Administration and leading Congressional Republicans agree that these trade agreements would create needed economic growth and good American jobs. American business, state and local leaders and many Congressional Democrats also support these deals. The Senate Finance Trade Subcommittee estimates that just the tariff reductions on goods under the Korean trade deal would create some 280,000 U.S. jobs, while opening Korea’s sheltered $580 billion services market would create additional American jobs in key service sectors.

But these trade agreements have been stalled while Washington has been wrangling, particularly over Trade Adjustment Assistance for trade-displaced workers.

Inaction in Washington is leading to new exports and new jobs. But the new exports are from France and Germany —not Florida and Georgia. And the new jobs are in Canada and Italy — not California and Illinois. America’s international competitors are chewing up yardage by implementing new trade pacts that open markets for their companies and workers — and are scoring considerable success.

The European Union’s new agreement with South Korea, which went into effect on July 1st, has slashed Korean duties on imports from Europe, saving hundreds of millions of dollars for European exporters and Korean importers. These savings are driving down Korean prices and increasing sales of European products, including chemicals, machinery, autos, food and consumer goods. In the first weeks after the new agreement came into effect, sales of European wines at Korean discount stores reportedly increased by some 40%. For July, price cuts on BMWs, VWs and other European brands contributed to a 12% increase in Korean imports of European autos over July 2010. Overall, EU exports to Korea in July were some 36% higher than the same month last year.

Canadian exporters expect a similar boost under Canada’s trade deal with Colombia, which went into effect on August 15th. This agreement immediately eliminated duties on Canadian wheat, leading the food producer that buys half of Colombia’s imported wheat to announce that it’s switching to Canadian grain.

These and other victories by our foreign competitors are coming at the expense of American exports and American jobs. According to a recent Agriculture Department analysis, lower duties under Colombia’s trade deal with its regional neighbors have slashed U.S. soy and grain exports to Colombia, contributing to a staggering $1 billion loss in U.S. farm exports since 2008. GE reportedly risks losing hundreds of millions of dollars in sales of U.S.-made steam turbines in Korea to European competitors that no longer face Korean duties. The National Association of Manufacturers estimates that American workers lose $8 million in wages and benefits for each day that the trade deals with Korea, Colombia and Panama are not in force, while the U.S. Chamber of Commerce predicts that the America could lose 380,000 jobs if it fails to implement these agreements.

According to National Association of Wheat Growers President Wayne Hurst, “Delaying these free trade agreements isn’t just a political game, it’s messing with real lives, here and abroad. And, it’s doing harm that can’t be easily undone.” Kim Murray of the USA Dry Pea and Lentil Council adds, “We’re cutting our own throats here.”

As football season begins, it’s time for America to play hurry-up offense on jobs and economic growth. We appreciate that there are differences in Washington over Trade Adjustment Assistance. Indeed, we have our own strong disagreements over the TAA program. But we agree that the United States shouldn’t stand on the sidelines while the game clock is running and other countries run up the score on trade. Our leaders need to huddle up, call a play, and get back in the game. Quickly approving the pending trade agreements with South Korea, Colombia and Panama will score important points for American businesses and American workers.

All it takes is a little teamwork in Washington.