Saturday, May 30, 2009

Panama FTA will create US jobs

May 2009
5-21-09 Hearing on "The U.S.-Panama Trade Promotion Agreement"
To view this hearing click here.

Hearing on "The U.S. - Panama Trade Promotion Agreement"

May 21 , 2009, at 10:00 a.m., in 215 Dirksen Senate Office Building
Member Statements:
Max Baucus, MT
Charles Grassley, IA

Witness Statements:
The following witnesses are scheduled to testify:
The Honorable Everett Eissenstat, Assistant U.S. Trade Representative for Western Hemisphere Affairs, Washington, DC
Mr. James Owens, Chairman and CEO, Caterpillar, Peoria, IL
Ms. Thea Lee, Policy Director, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), Washington, DC
Mr. Sam Carney, President-Elect of the National Pork Producers Council, Adair, IA


Panama and Protectionism

May 21 2009, 6:03 pm by Daniel Indiviglio

The Senate Finance Committee held a hearing today to discuss creating a NAFTA-like free trade agreement with Panama. As with every political issue, it has its opponents. But given the specifics concerning the U.S.'s current trade situation with Panama, this agreement seems like kind of a no-brainer.

The age-old protectionist argument against free-trade agreements was given by Thea Mei Lee, policy director of the AFL-CIO, at the hearing:
As long as we continue to run trade deficits on the order of five percent of GDP, the arguments that we need more trade liberalization to succeed in the global economy ring hollow - especially to our members, who have seen too many jobs go offshore while their wages and benefits stagnate.

Really? Because fellow panelists James Owens, Chairman and CEO, of Caterpillar and Mr. Sam Carney, President-Elect of the National Pork Producers Council who represent manufacturing and farming - the two industries supposedly hit hardest from free trade - both testified in favor of the agreement. They support the agreement because it will better facilitate the export of their products, produced by the hands of U.S. workers, to Panama.

Committee chairman Senator Max Baucus (D-Mont.) also supports the agreement. He did a good job of explaining why a free trade agreement with Panama in particular will benefit the U.S. and its workers:
The Panama agreement also provides new opportunities for American farmers, ranchers, and businesses. Panama already exports most of its goods to the United States duty-free under our trade preference programs. This trade agreement will level the playing field. It would provide the same duty-free treatment to our industrial and agriculture exports to Panama.

This agreement will, for example, immediately eliminate all duties on more than half of our agricultural exports to Panama. That includes high-quality American beef from states like Montana.

This agreement will also immediately eliminate tariffs on 80 percent of U.S. industrial exports to Panama.

The agreement provides U.S. manufacturers and farmers the opportunity to be more competitive when exporting goods to Panama. In other words, it would create U.S. jobs, not destroy them. Meanwhile, Panama will gain very little from the agreement, other than more U.S. imports, as most of its exports to the U.S. are already duty free.

That's why the National Association for Manufacturers also supports the agreement. I spoke to Frank Vargo, one of their trade experts, who is very frustrated that some people are convinced that free trade agreements cause the loss of U.S. jobs. He was kind enough to provide the following graph, based on Bureau of Labor Statistics, which shows manufacturing jobs falling before and growing after NAFTA was put into place.

He also says that the U.S.'s massive trade deficit (which the AFL-CIO complained about above) is mostly due to trade with non-free trade agreement countries like China and Japan. Of that deficit, the portion resulting from free trade partners is a small part, according to Vargo.

One big question mark in the free trade discussion is where the Obama administration stands. While its position is clear on many issues, trade is not one of them. But if today's committee hearing creates some momentum to get a Panama free-trade agreement through Congress, we may find out where the president stands soon enough.

Full text in

Pork Producers Urge to Pass Panama Trade Agreements

Washington, D.C, May 22 -

A U.S. trade agreement with Panama will provide new market opportunities for a wide range of American agricultural products, the National Pork Producers Council yesterday told a Senate committee, and it will level the playing field for U.S. pork producers and other food producers.

NPPC President-Elect Sam Carney, a pork producer from Adair, Iowa, testifying before the Senate Committee on Finance, noted that most products from Panama enter the United States at a zero tariff rate because of the Caribbean Basin Economic Recovery Act and the Generalized System of Preferences, while most U.S. agricultural products going to the Central American country are subject to an average tariff of 43 percent.

"Implementing the pending trade agreement with Panama will level the playing field so that U.S. producers and exporters of food and farm products receive reciprocal market access," said Carney. "It also will open to U.S. pork producers, other agricultural sectors and U.S. businesses a market of almost 3.4 million consumers."

U.S. pork exports to Panama currently are restricted by a small quota and out-of-quota duties as high as 80 percent. Under the Panama Trade Promotion Agreement, U.S. pork variety meats would receive immediate duty-free treatment, and the trade deal would expand market access for U.S. pork muscle meat through tariff rate quotas (TRQs). The TRQs will be phased out in 15 years, and when the agreement is fully implemented, U.S. pork will have unlimited duty-free access to the Panamanian market.

In addition to the favorable market access provisions, the agreement resolves significant sanitary and technical issues. Panama, for example, will recognize the meat inspection system of the United States as equivalent to its meat inspection system.

According to Iowa State University economist Dermot Hayes, the Panama trade agreement will add 20 cents to the price producers receive for each hog marketed, with pork exports to Panama expected to be worth about $23 million a year.

National Foreign Council (NFTC) Commends Senate Finance Committee for Holding Hearing on U.S.-Panama FTA

Consumer Electronics Association (CEA)® Urges Senate Action on U.S.-Panama Trade Pact

Retail Industry Leaders Association (RILA) Applauds Senate Finance Committee for Pressing Forward on Panama Trade Agreement

Caterpillar Chairman Urges Passage of U.S.-Panama Trade Promotion Agreement =

Camp (R-MI), Brady (R-TX) Congratulate Senate Finance Committee for Holding Hearing on U.S.-Panama Trade Promotion Agreement

Obama Delays Panama Trade Pact After Unions Object (Update2)

US-Panama Free Trade Links

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