Trade Doesn’t Take Vacations
By Shannon Schlecht, USW Director of Policy, and Tyler Jameson, USW Assistant Director of Policy
The Obama Administration and the U.S. Congress need to act upon the pending free trade agreements with Colombia, Panama and South Korea before they leave Washington, DC, for the traditional August recess. If the agreements are left hanging again, U.S. wheat farmers will immediately lose hard-earned sales to their Canadian competitors while they are working long days to harvest their new crop and while their government representatives are home courting voters or enjoying a vacation. On August 15, the day the Colombia-Canada free trade agreement (FTA) is implemented, Canadian wheat will begin entering Colombia with zero duties and U.S. wheat will be the last major supplier to face import duties.
Free trade agreements have real and immediate impacts. For example, the European Union-South Korea FTA went into effect July 1. In just two weeks, as reported by the Wall Street Journal, trade between the two parties increased 17.4 percent. This comparison clearly illustrates the immediate gains in trade Canada will enjoy with Colombia once their FTA goes into effect. Even when the United States finally implements its FTA, trade lost to Canada will not magically return — it will take time and a lot of market development work to rebuild U.S. exports.
The United States has already lost market share in Colombia because of preferential trade terms granted to South American countries party to the Mercosur trade agreement. From 2008 to 2009 alone, USDA reported that the Mercosur share of the Colombian wheat market rose 10 percent, while the United States’ market share dropped.
The three FTAs have been close to the finish line many times without making it to the winner’s circle. There is no time to delay — our competitors are not taking a break from aggressively pursuing new markets and neither should we. U.S. trade policy needs to move forward — before taking a summer vacation — especially when there is so much to lose in the absence of action. In contrast, there is much to gain from trade, including jobs and increased economic activity for the U.S. economy and our global trading partners.