Long-delayed U.S. trade deals zip toward approval

Reuters News
Posted: Oct 11, 2011 1:14 PM
Long-delayed U.S. trade deals zip toward approval

By Doug Palmer

WASHINGTON (Reuters) - Three long-delayed free-trade agreements expected to provide tens of thousands of jobs and boost U.S. exports by about $13 billion a year are close to final congressional approval just 10 days after the White House sent them to Congress.

The Senate Finance Committee is expected to back the deals with South Korea, Panama and Colombia on Tuesday afternoon, clearing the way for votes in both the full House of Representatives and Senate on Wednesday.

The speed at which the trade agreements are moving through Congress contrasts with the four to five years they were stuck at the White House because of mostly Democratic Party concerns.

Senator Rob Portman, an Ohio Republican and former U.S. trade representative, told Reuters the sprint toward final congressional approval was appropriate after the years of delay and months of political maneuvering that led to President Barack Obama submitting the agreements to Congress on October 3.

"It's good for the economy at a time when we're having a hard time agreeing on anything here in Washington," Portman said. "But, second, I do think it sends an important signal to the world that America is moving forward."

South Korean President Lee Myung-bak will speak to a joint session of the Congress on Thursday before heading to a state dinner at the White House, giving lawmakers another incentive for fast action on the pacts.

House Democratic Whip Steny Hoyer told reporters on Tuesday he expected all three agreements to pass with bipartisan support. However, opponents say they expect more than half of House Democrats to go against Obama and vote against the deals.

The deal between the United States and South Korea, the world's largest and 14th largest economies, respectively, would be the biggest U.S. trade deal since the North American Free Trade Agreement, which went into force in January 1994.

U.S. farm and manufactured goods exports are expected to rise under all three agreements as tariffs are phased out, with the biggest gains coming from the South Korea agreement. The deals also open new markets for U.S. companies in service sectors such as banking, insurance and express delivery.

Unions generally oppose the agreements, fearing they will encourage companies to move their operations abroad.

The U.S. International Trade Commission, in a September 2007 study, estimated the Korea pact would boost U.S. imports from that country by $6.4 billion to $6.9 billion, with gains in areas such as clothing, leather goods, footwear, electronics, machinery and cars.


For Portman, the vote on the pact with South Korea will be particularly satisfying since he started negotiations with the longtime ally in February 2006, when he was U.S. trade representative under former President George W. Bush.

The two countries reached a deal 14 months later and signed the agreement in June 2007 but Bush was unable to win approval of the accord and the other deals with Panama and Colombia before leaving office in January 2009.

Obama has worked to address Democratic concerns about the pacts, which the administration estimates will help create or sustain tens of thousands of American jobs.

That included renegotiating auto provisions of the South Korean agreement to get a better deal for American auto companies, which complained the original pact failed to tear down South Korean barriers to foreign cars while phasing out the United States few remaining auto tariffs.

The White House also negotiated a tax information exchange agreement with Panama to address concerns about that country's bank secrecy laws, and an "action plan" with Colombia to help it strengthen its labor regime and protections for worker.

Many Democrats still believe Colombia needs to do more to stop killings of trade unionists and prosecute those responsible. Votes last week in a House committee showed support for the Colombia deal was the weakest of the three, although it still sailed through by a two to one margin.

Portman said he was pleased that Congress was poised to approve all three pacts with bipartisan votes but discouraged that the United States has not been moving more aggressively to strike additional agreements.

"These agreements have been sitting on the sidelines as the U.S. sat on the sidelines," Portman said, adding that rival deals between the European Union and South Korea and Colombia and Canada were negotiated, signed and put into force while the U.S. deals languished.

(Additional reporting by Thomas Ferraro; Editing by Bill Trott)