United States-Korea Free Trade Agreement Implementation Act--Continued
Floor Speech
BREAK IN TRANSCRIPT
Mr. THUNE. Madam President, I, too, rise in strong support of the pending trade agreements with America's allies, Colombia, South Korea, and Panama.
These agreements hold great promise for American farmers, manufacturers, service providers, and American consumers. I would echo my colleague from Oregon, who chairs the Subcommittee on Trade on the Finance Committee; that is, these trade agreements position American businesses to capture more of that supply chain to enable us to create jobs here at home and to grow the economy, to generate economic activity out there that otherwise we would not see happening. At a time when we need to focus our efforts on measures that will promote economic growth and job creation, these agreements are exactly the type of legislation we ought to be considering.
There is broad consensus these agreements are going to benefit our economy. The Obama White House estimates that enactment of these three trade agreements will boost exports by at least $12 billion, supporting over 70,000 American jobs.
The Business Roundtable estimates that passage of these trade agreements will support as many as 250,000 American jobs. These are not only jobs at large businesses but increasingly at smaller companies that are accessing international markets.
As an example of that, more than 35,000 small and mid-sized American businesses export to Colombia, Panama, and South Korea, and these firms now account for more than one-third of U.S. exports to these countries. Passing these three trade agreements will provide export opportunities to American businesses of all sizes, creating good-paying jobs here at home.
The benefits to U.S. agriculture from passing these agreements are especially compelling. These three agreements are estimated to represent $3 billion in new agricultural exports that will support 22,500 U.S. agricultural-related jobs.
My State of South Dakota is a good example if you look at the export potential for U.S. agriculture represented by these agreements. According to the American Farm Bureau Federation, these agreements will add $52 million each year to South Dakota's farm economy. South Dakota is projected to gain $22 million from increased beef exports, $25 million from increased exports of wheat, soybeans, and corn, and $5 million from increased pork shipments each year.
America's market is already largely open to imports from many of our trading partners. In fact, almost 99 percent of agricultural products from Colombia and Panama, for example, already enters the United States duty free. Without trade agreements to ensure similar treatment for our exporters, American businesses will continue to face high tariff and nontariff barriers abroad.
Consider just one example, the market for agricultural products in Korea, which is the world's 13th largest economy. Korea's tariffs on imported agricultural goods average 54 percent compared to an average of 9 percent tariff on their imports into the United States. So passage of the Korea Free Trade Agreement will level this playing field. Think about that. Fifty-four percent for our exporters to get into the Korean market, 9 percent tariff for their exports coming here. That is a huge discrepancy that will be rectified by passage of this agreement.
Korea's market for pork products in particular underscores how removing barriers to trade can benefit U.S. farmers and ranchers. U.S. pork exports to South Korea have increased 130 percent from January to July of this year because Korea temporarily lifted its 25 percent duty on pork imports due to an outbreak of foot-and-mouth disease in Korea.
During this period, the Korean market surpassed Canada to become the third largest export destination for U.S. pork producers after Japan and Mexico. Korea's tariff on pork imports is expected to return but would be permanently eliminated by 2016 under the terms of the United States and South Korea Free Trade Agreement.
We know when we eliminate barriers to U.S. exports, American producers will compete and win in the global marketplace. However, if we fail to act and continue to delay implementation of these agreements, the cost to our economy will also be substantial. The U.S. Chamber of Commerce study warns that failure to enact the three pending free-trade agreements could threaten as many as 380,000 American jobs and the loss of $40 billion in sales. The cost of inaction on trade is high because today we live in a global economy where American producers rely on access to foreign markets.
Consider that in 1960, exports accounted for only 3.6 percent of our entire GDP. Today exports account for 12.5 percent of our entire GDP. Exports of U.S. goods and services support over 10 million American jobs. When America stands still on trade, the rest of the world does not. Today there are more than 100 new free-trade agreements that are currently under negotiation around the world. Yet the United States is only party to one of those negotiations; that is, the Trans-Pacific Partnership.
If we do not aggressively pursue new market-opening agreements on behalf of American workers, we will see new export opportunities go to foreign businesses and foreign workers. Unfortunately, that is exactly what we have experienced under the current administration. The three trade agreements we are considering today were signed over 4 years ago, and this administration had more than 2 1/2 years to submit them to Congress for consideration but failed to do so.
Instead, the President chose to sit on these agreements and not send them to Congress for nearly now 1,000 days. We cannot quantify precisely the cost of this unfortunate delay, but we know it put American exporters at a competitive disadvantage in the Colombian, Korean, and Panamanian markets. For example, on July 1 the European Union-Korea trade agreement went into effect. In just the first month after this agreement took effect, EU exports to Korea jumped nearly 37 percent, while U.S. exports to Korea rose by only 3 percent.
Let's be clear about what this means. Korean consumers are choosing to buy German, French, and British cars, electronics, and agricultural products rather than American-made products because those European products now have a price advantage. This would have been entirely preventable if we had acted on the U.S-Korea trade agreement sooner. Likewise, the Canada-Colombia agreement went into effect on August 15 of this year. This is resulting in an advantage for Canadian goods such as construction equipment, aircraft, and a range of other industrial and agricultural products. Colombia is now reporting that since the Canada-Colombia trade agreement took effect, there has been an 18.3-percent increase in Colombian imports of Canadian wheat.
Much as with Korea, U.S. businesses are finding themselves disadvantaged because the President waited so long before sending these agreements to Congress. Unfortunately, the negative impact of the Canada-Colombia agreement on U.S. exporters is just a continuation of the lost export opportunities we have seen over the past few years as these trade agreements have lingered.
Just a few years ago, American wheat producers dominated the market in Colombia with a 73-percent market share, as of 2008. Today we are facing a situation where U.S. wheat producers are likely to be completely shut out of the Colombian market if we do not act. Hopefully, by passing this agreement today and by swiftly implementing the U.S.-Colombia trade promotion agreement, our wheat producers will be able to recover much of their lost market share. But they should never have been placed in this position to begin with.
In 2010, for the first time in the history of U.S.-Colombia trade, the U.S. lost to Argentina its position as Colombia's No. 1 agricultural supplier. Now, consider the story of three of the major crops that we grow in South Dakota: soybeans, corn, and wheat. The combined market share in Colombia for these three U.S. agricultural exports has decreased from 78 percent in 2008 to 28 percent as of 2010, a staggering decline of 50 percentage points in our market share.
U.S. corn sales to Colombia fell from 3 million metric tons in 2007 to 700,000 metric tons in 2010. This is the high cost of delay while our trading partners pursue new regional and bilateral trade agreements. There has also been the cost of duties that have been paid on U.S. exports while these agreements are waiting. U.S. companies have paid more than $5 billion in tariffs to Colombia and Panama since the trade agreements with these nations were signed more than 4 years ago.
Let's consider the cost of delay to just one American company, Caterpillar. We all know Caterpillar is a leading producer of large construction and mining equipment and a major U.S. exporter. Caterpillar exports 92 percent of its American-made large mining trucks. Caterpillar's large truck exports to Colombia face a 15-percent duty which adds about $300,000 to the cost of each of these trucks exported to Colombia.
I mean, how does that work? Think about that. Every truck that Caterpillar sends into the Colombian market, it is an additional $300,000 on top of the cost of that piece of equipment for the tariff that has to be paid. Just imagine the advantage that Caterpillar could have had for the last several years over its Japanese and Chinese competitors if the House of Representatives--at the time was controlled by the Democrats back in 2008--had not refused to consider the Colombia agreement when President Bush submitted it or if the current administration had acted sooner, and that is just one example of countless others out there with American businesses.
So I am glad we are here today. I expect all three trade agreements to pass with what I hope is broad bipartisan support. I hope we also have learned an important lesson. We cannot afford to delay when it comes to international competition in trade. I hope the White House has learned an important lesson as well rather than submitting to Congress divisive measures where there are fundamental disagreements, such as new tax increases. This administration should identify measures such as these trade bills that will spur our economy and where there is broad bipartisan agreement.
The President sent his American Jobs Act to Congress exactly 1 month ago today. Yet we only, just last night, voted on whether we should consider this bill--a vote that did not get a single Republican vote, and it did not get every Democratic vote either. Contrast that approach with these free-trade agreements which were submitted to Congress by the President on October 3, just 9 days ago. Within about a week and a half, these trade agreements will have passed the relevant committees in the House and the Senate with large bipartisan votes and will be on the President's desk awaiting his signature.
Clearly, reaching across the aisle on measures where both parties can find agreement is a much more effective approach. So I would urge my colleagues to support these job-creating trade bills based upon their merit. I would also urge my colleagues to support these bills to send a message that when this administration is willing to send us commonsense, progrowth legislation, we are ready and willing to pass it.
We can only hope our votes on these trade agreements will set that precedent. I look forward to voting for these long overdue agreements on behalf of American businesses and consumers. I look forward, hopefully, to being able to act on what are truly progrowth job measures in the coming weeks and months.
We have an economy that continues to struggle with over 9 percent unemployment. Month after month we continue to see a lot of Americans who are without jobs, and this is one example of something we can do to address that concern. But there are lots of other things out there we can be doing as well if we are willing to identify those things on which there is agreement and those types of policies that actually do create jobs that are about getting Americans back to work and not about making some sort of a political statement.
I hope this will set a pattern and a trend that will be replicated in the future and that we can do some things that are good for our American economy and for American jobs.
BREAK IN TRANSCRIPT
Source