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The U.S. Trade Agenda

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 Now that Washington, D.C. has had an opportunity to thoroughly digest and analyze last week’s mid-term election and dramatic gains by the Republican Party, the nation’s attention has pivoted toward consideration of whether or not a divided government can effectively work together to aid our nation’s economic recovery. One area where many Washington analysts believe progress through compromise can be made is in U.S. Trade policy.

President Barack Obama has long supported an export led economic recovery. He has stated his desire to double U.S. exports by 2015. This week, while traveling in Asia, U.S. and South Korean trade officials are hurrying to finish revisions to the US-South Korea Free Trade Agreement first signed in 2007. The U.S. and Korea are trying to negotiate provisions to accommodate the concerns of U.S. auto makers and the beef industry ahead of the President’s visit on Thursday, November 11. The U.S.-South Korea trade pact is important because it represents the first agreement signed with a North Asian country and because South Korea is a friendly ally of some sixty years.

Congressional Republicans have shown interest in passing the Korea FTA and perhaps also passing the pending trade agreements with Colombia and Panama. Senate Minority Leader, Mitch McConnell, has already discussed the trade agreements with President Obama. Additionally, the incoming chair of the House Ways and Means Committee and the new Trade subcommittee chair both support free trade. However, passing the agreements will present a significant challenge to the Administration because of strong opposition, particularly to the Colombia FTA. Labor Unions and key Democratic lawmakers remain adamantly opposed to agreements they believe will hasten U.S. job losses and restrict U.S. exports.

Meanwhile House Republicans and the Administration see Colombia’s FTA as a very important bi-lateral economic and foreign policy initiative. The agreement seeks to balance the scales by eliminating tariffs and trade barriers on U.S. goods in Colombia, a status that Colombian goods coming into the U.S. already enjoy under the Andean Trade Promotion Agreement, while supporting Colombia’s economic development and the fight against narco-trafficking. Labor unions fear its passage turns a blind eye to Colombia’s human rights violations—especially the violent attacks on trade unionists. Supporters argue the agreement will only enhance Colombia’s enforcement of labor and environmental laws and dramatically increase U.S. exports to Colombia, providing a much needed boost to the U.S. economy.

While the Congress and the Administration begin to negotiate how best to implement the President’s trade agenda, our international trading partners are not sitting idly by waiting for us to figure out our next move. South Korea recently completed a trade agreement with the European Union and Colombia finalized an agreement with Canada. The longer we delay passage of these agreements, the more export opportunities we are losing as these countries instead identify sources in other countries with whom they have agreements. Aditionally, many nations looking to bolster the global economic recovery through trade desire strong U.S. leadership for free trade and away from the global trend toward protectionism.

There is no easy route toward compromise in divided government and no one knows this better than President Barack Obama. Nonetheless, the American voters spoke loud and clear last week about the need for real leadership focus on jobs, economic growth and cooperation. As we have highlighted on this blog in the past trade is an area worthy of leaders coming together to promptly address these issues. Divided government may provide us the opportunity to focus on new areas of mutual interest and pass substantive legislation that will have an impact at home and abroad.

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