Obama backs Bush era free trade deals

The following article is of interest to those wishing to keep track of "fair trade" vs "free trade". Obama is backing Bush projects:

Note: this is copyrighted article and I shall withdraw if objections made

Obama Likely to Push for Approval of Pending Bush Trade PactsThe new president is making the same case that Bush made, but this time Congress will listen.By Andrew C. Schneider May 26, 2009

Odds are improving that Congress will ratify three free trade agreements (FTAs) negotiated by the Bush administration. The White House is making an aggressive push to get the deals approved, partly to boost exports and create jobs, but more importantly for diplomatic reasons.
Leaving the trade pact with South Korea unratified risks damaging a key alliance, at a time when Seoul's help is essential in efforts to contain a nuclear-armed North Korea. Likewise, President Obama is determined to improve U.S. relations with Latin America. Colombia and Panama are two of the most reliable U.S. allies in the region, and their cooperation is critical to U.S. efforts to combat cocaine trafficking. Letting deals with them falter risks alienating both and would strengthen Venezuela, which would attempt to sell itself as a more trustworthy partner to its neighbors.

President Bush made the same points in defense of all three trade agreements. But while Democrats balked at handing Bush any diplomatic victories in the run-up to the 2008 election, they are more likely to accept same reasoning from Obama. Secretary of State Hillary Clinton will make the national security argument as well, nailing down additional votes.

John Gilliland, a former Democratic trade counsel for the Senate Finance Committee now with the law firm Akin Gump Strauss Hauer & Feld, notes a definite change of mood on Capitol Hill. "There's clearly a sense that [Mont. Sen. Max] Baucus and [NY Rep. Charles] Rangel want to move this forward," says Gilliland, referring respectively to the chairmen of the Senate Finance and House Ways & Means Committees.

The Panama deal, the smallest and least controversial treaty, will pass by July. Congress still wants some answers about Panama's tax and bank secrecy laws. But in the end, it'll approve the pact, opening up trade and investment opportunities tied to the expansion of the Panama Canal.
The Colombia pact, which faces stiffer opposition, won't come up till late in the year. Unions are leaning hard on Democrats to block ratification of the agreement, alleging Colombia still isn't doing enough to rein in violence against organized labor. Obama will work with President Alvaro Uribe and congressional Democrats to develop benchmarks for progress in order to secure enough votes for passage.

The benefits of both of these pacts largely accrue to the U.S. Most goods from Colombia and Panama already enter the U.S. duty free under existing trade preferences. By contrast, both Panama and Colombia currently apply tariffs ranging from 8% to 15% to a wide variety of manufactured goods, with rates in the high-double and even triple digits for agricultural products. Further, both countries currently ban the import of remanufactured goods. That’s a potentially lucrative market for U.S. industrial and consumer exports, including cell phones, computers and earthmoving equipment.

U.S. sectors that stand to gain the most from eliminating such tariffs include construction services and equipment, infrastructure and machinery, power generation and transmission, transportation, information technology, chemicals, building materials, medical equipment, financial services, cotton, beef, poultry, wheat, soybeans, fruits, vegetables and processed foods. The pacts would also provide additional security for U.S. direct investment and intellectual property rights.

Korea, the biggest prize, will probably remain out of reach till 2010. Rust Belt members, notably House Trade Subcommittee Chairman Sander Levin (D-MI), still worry the pact gives too much of a competitive advantage to Korean carmakers at the expense of the besieged Detroit Three.
Working out a compromise will be tough. Korean legislators are just as sensitive on the issue as their U.S. counterparts, and with good reason. Last year, President Lee Myung-bak relaxed an import ban on American beef, in place since the 2003 discovery of a case of mad cow disease in Washington state. Farm state legislators in the U.S. -- including Baucus and Iowa Sen. Chuck Grassley, the Finance Committee's ranking Republican -- refused to support the Korea agreement as long as the beef ban was in place. While Lee's action won additional support for the pact in Congress, it also triggered riots in Seoul.

Obama will use Lee's U.S. visit in June to start negotiations about how to resolve the auto impasse. He'll aim to wrap up talks and send the Korea-U.S. FTA to Congress for ratification by early next year. Waiting any longer would risk letting the deal become entangled in election year politics.

The U.S. International Trade Commission estimates that eliminating tariffs and tariff-rate quotas on U.S. goods shipments to South Korea would boost U.S. exports by $10 billion a year. As a point of comparison, exports of U.S. goods and services to Korea for the whole of 2008 totaled just under $35 billion.

http://www.kiplinger.com/businessresource/forecast/archive/Approval_of_Pending_Trade_Pacts_090526.html
All contents © 2009 The Kiplinger Washington Editors