Commentary: It's time for Congress to act on free trade agreements

Issue Date: July 14, 2010

By Rep. Wally Herger

Rep. Wally Herger

For over a year now, our trade agenda has taken a back seat to other federal priorities. This has largely gone unnoticed as Americans focus on economic recovery and demand action on jobs. The reality, however, is that trade supports jobs and local economies, and expanding market access for our exports would boost both.

Californians rely on trade more than any other state in the nation. Indeed, exports account for one quarter of California’s economy. Our agricultural industry is especially dependent on trade, as the wide variety of products we export accounts for nearly 40 percent of all agricultural sales. These agricultural exports alone support approximately 160,000 California jobs on and off the farm in food processing, storage and transportation. Increasing California exports by tearing down foreign barriers to our goods is a must in these difficult economic times, yet the administration and congressional Democratic leadership seem content to ignore trade and the private sector jobs that would be created with expanded access to global markets.

With global trade negotiations stalled, bilateral free trade agreements provide the best opportunity to expand exports by reducing agricultural tariffs and eliminating unscientific standards and other nontariff barriers that discriminate against U.S. exports. We have completed negotiations on free trade agreements with Colombia, Panama and South Korea. These are critical markets for California farmers and ranchers. Colombia, for example, has been the third largest market for U.S. agricultural exports in the Western Hemisphere, behind only Canada and Mexico, for the last five years. South Korea is America’s sixth largest export market for agricultural goods worldwide.

California leads the nation in agricultural exports. Congress has yet to act on free-trade agreements with Colombia, Panama and South Korea, which would reduce tariffs on U.S. farm goods sold to the three nations.

If enacted, these pending agreements would level the playing field for U.S. goods. Currently, our exports to these nations face much higher tariffs than their products do here. For example, 90 percent of Colombia’s exports into the U.S. already enter duty-free but our agricultural products face duties up to 21 percent. The situation is similar in Panama, and Korean tariffs on U.S. agricultural goods are four times the level of American tariffs. Passing the three pending trade agreements will remove these inequities, spurring exports and creating jobs here in California.

Unfortunately, these market opening agreements have been sitting idle for over three years. Not only are we missing an opportunity to boost our struggling economy, we are putting jobs at risk as our foreign competitors move to lock in agreements that will put U.S. exports at a significant competitive disadvantage. In this time, Colombia has negotiated agreements with Canada and the European Union and implemented agreements with Argentina, Brazil, Paraguay and Uruguay. Because Congress failed to enact the U.S.-Colombia agreement, our competitors are reaping the benefits of preferential access to the Colombian market that should have gone to America’s farmers and ranchers. As a result, the American Farm Bureau Federation found that U.S. agricultural exports to Colombia dropped 50 percent last year, as Argentina and Brazil have used their trade agreements and new duty-free access to take market share away from American exporters. California agricultural producers could lose even more exports and market share in Colombia if Canada and the European Union implement their trade agreements with Colombia before the United States does.

Recently, the president committed to finalize and move the U.S.-Korea Free Trade Agreement before the end of the year. This is a very encouraging step, and I hope the president will follow through on his commitment. Failure to act quickly on the U.S.-Korea agreement will have severe consequences for California agriculture, given the size and importance of the Korean market and the competition our goods will face. South Korea is expected to implement an agreement with the European Union before the end of this year and is finalizing negotiations with Australia. If both the EU and Australia, two of our biggest agricultural competitors, secure lower tariffs for their goods before the U.S., American products like dairy, beef and wine will largely be shut out of the market. Our exports to Korea are already becoming more expensive because of the debt crisis in Europe and the strengthening dollar. The Korea-EU and Australia agreements will be another significant blow to our exports and American workers.

Passing the pending agreements would provide real economic benefits and ensure the continued competitiveness of our farmers and ranchers. Unfortunately, the Obama administration and Democratic leadership have been overly concerned with accommodating their key supporters to the point that they are willing to forego the potential to create real jobs through expanded exports. Californians, especially our farmers and ranchers, must understand that the status quo is not without cost. It is time that the administration and the Democratic leadership in Congress recognize that reality, demonstrate their promise of bipartisan leadership and move to approve these agreements without further delay.

(Rep. Wally Herger, R-Chico, is a senior member of the House Ways and Means Committee and serves on the trade subcommittee.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item. Top