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Beyond The Headlines on Passing The TPA: What Senator Baucus and Amb. Kirk Actually Said

March 11, 2011

The Senate Finance Committee held an important hearing this week when it invited US Trade Representative Ron Kirk to explain whether and when the Administration will submit the US-COL Trade Promotion Agreement to Congress. The result was a still split Administration position, reflecting its internal conflicts between pro-trade and economic recovery elements, on the one hand, and elements watching the re-election process and needing full support from unions especially at a time when, as in Wisconsin, the labor union movement is under siege. This is a false choice. Pro-union is pro-jobs, at home. Siding with union leadership on a foreign workers issue is fine until US jobs suffer and foreign workers aren’t helped. US workers gain when their employers engage in robust exports to Colombia, and US workers are sidelined watching Colombian firms buy farm and manufactured and high-tech products and services from China, Canada, Europe, the Southern Cone, India, and soon Korea.

Hanging tough, President Santos, through Ambassador Silva, called for passage of the TPA “as negotiated.” This was a tough stand, coming in the middle of talks started last month on unspecified changes the US sees as necessary to satisfy labor union forces in the Administration. Colombia means, in effect, we’re not very interested in negotiating further changes and incurring further delay and are prepared to go elsewhere if there is no deal to be done.”

More senators including Finance Committee Chair Baucus to take up the Colombian, Panamanian, and Korean agreements in the order they were negotiated and signed (as is Congress’s tradition). This is another way of saying we will hold up consideration of the Korea agreement until Colombia’s has been voted on. That is just what Senator Hatch said.

As I see it, the Administration will let the US-COL TPA pass on time, either grudgingly and as part of a compromise, or taking credit at the last-minute for cosmetic changes to a good agreement that has already been negotiated. The Administration will get to keep some “street cred” with organized labor’s leadership. Forces more concerned with jobs and relations with a vital ally and strong friend will pass the TPA.  I stand by my published projections.

First, see how Ambassador Kirk pivots from generalities about progress in negotiations to a blunt reminder that the labor unions’ unspecified demands must be satisfied:

 

With the same engagement and bipartisan cooperation as on the Korea agreement, we will address outstanding concerns relating to the Panama and Colombia agreements. We will not be left behind as others secure greater market share at the expense of American exporters. To compete, we must access the world`s fastest growing markets on a playing field that is both level and reflects our values as Americans….

There has also been important activity regarding the Colombia agreement since I testified before the House Ways and Means Committee last month. Soon after that hearing, officials from USTR led a mission to Bogotá with officials from the Departments of State and Labor and the White House. Over the last few weeks, we have met with this committee`s staff as well as stakeholders to consult and seek advice on the issues raised. Together, we are working without delay to assess what we can do on issues regarding laws and practices affecting the protection of internationally recognized labor rights, as well as issues concerning violence against labor leaders and the prosecution of the perpetrators. The Obama Administration and the Santos Administration have a shared commitment to protect labor rights and workers from violence. I am committed to working with you to address the concerns identified this year and to prepare the agreement for Congressional consideration immediately thereafter.

 (ed. – But…)

As we look to the future, the President has made one thing abundantly clear: we will not sign agreements for agreements` sake. They must be enforceable and of the highest standard, in the interests of our workers, farmers, ranchers and businesses. They must not simply replicate the templates of the past, but build frameworks for the future.

Hearing that testimony, Colombian officials in the room should have been left wondering a couple of things. Why did Kirk not show a bit more praise for their work? Kirk and others have more robustly acknowledged Colombian successes in reducing general conditions of violence. In fact, unsolved labor leader murders are at much lower levels than other kinds of violence. And why was Kirk so blunt, yet vague, about not repeating “old templates” (does he mean signed agreements?) and “highest standards” (for example?).

 

Finance Committee Chair Senator Baucus (Democrat) returned from his lengthy meetings and visits to Colombia over the last couple of weeks convinced of the need to approve the TPA. His is the most powerful voice backing passage and much more powerful in the Senate than the President’s. He focused on jobs and competition from China.

 

First, it is time to quickly resolve the outstanding issues in our pending FTAs with Colombia, Panama, and Korea, and we must approve all three agreements this year.

Colombia has a strong and growing economy, it is among the largest markets in Latin America for U.S. exporters, and it is a strategic partner in our fight against drug trafficking and terrorism.  

I traveled to Colombia two weeks ago. I met with President Santos, his ministers, Colombia`s top prosecutor and labor leaders. I was struck by the progress that Colombia has made in strengthening labor rights, reducing violence and stepping up prosecutions.

 

Colombia has enacted reforms to make it easier for workers to form unions and bargain collectively. It has reduced the homicide rate of union members by nearly 90 percent, and it is prosecuting labor violence cases identified by Colombian labor unions as top priorities.

But more steps are needed, and President Santos has begun to take them. I believe that he is willing to work with us to take more steps, but he needs to know what we want him to do. We must map a course, and we must act now.

American farmers lost $1 billion in sales to Colombia over the last two years. And while China has tripled its share of the Colombian market, ours has declined by 20 percent. American jobs are at stake. 

Last month, Senator Hatch and I sent a letter asking you to come to the hearing today prepared to discuss the specific issues that Colombia and Panama need to address, and we asked you to come prepared to announce an expeditious timetable for moving these agreements through Congress. We look forward to discussing both issues this morning.  

Senator Hatch (the top Finance Committee Republican) said despite the Administration’s promises and appearance of action, it is no closer to submitting the TPA and that he will act if they will not:

At the top of a pro-growth agenda is trade policy. Yet instead of leading the way, we are falling behind our trading partners. While we wait, other countries are writing the rules of trade. While we hesitate, other countries are opening up markets for their workers. 

And if this sorry record is not corrected, U.S. workers will continue to lose out on the economic opportunities afforded by free and open trade.

A case in point: Colombia.

In 2008, the United States was the main supplier of corn, wheat and soybeans to Colombia, accounting for seventy-one percent of the market. Today, our market share is just twenty-seven percent.

 It does not take a Ph.D. in economics to understand this collapse.

 While our trade agreement with Colombia collected dust, other countries were surging ahead.

The same pattern holds in Panama, where we continue to lose out on lucrative government procurement projects.  

Some suggest that the strong interest in quick approval of our trade agreements with Colombia and Panama is driven by partisanship.

I am not going to pull my punches here. That is false. There is strong bipartisan support for these agreements in this Committee and in the Senate.

Any further doubts can be laid to rest by a recent letter from a bipartisan group of former government officials — including USTRs, White House Envoys to the Americas, and Assistant Secretaries of State — all calling for prompt ratification of our pending trade agreements with Colombia and Panama.

 Now, I appreciate the work that the Administration has done in regard to Korea.

 Korea is a friend and ally of the United States.

 And, while we need to see more progress on beef access, it remains a strong agreement.

 I support it, and want to see it move as soon as possible.

But I don’t believe the President will ever act on the Colombia and Panama agreements unless these agreements move with Korea.  

This skepticism is not unjustified.

In 2009, the Administration said they were developing a plan of action to address the pending trade agreements in consultation with Congress and pledged to address any issues promptly.

Later, at the Summit of the Americas President Obama directed Ambassador Kirk to lead a review of the Colombia Agreement to solve outstanding issues.

In 2010 the Administration laid out general concerns but vowed to move the agreements forward at the appropriate time. A little later, they pledged to strengthen relations with key partners…with the goal of moving forward with existing agreements in a way that upholds our values.

Then, in 2011, President Obama vowed to pursue agreements with Panama and Colombia.

Just a month ago, the President directed USTR to immediately intensify engagement with Colombia and Panama.

And just yesterday we received testimony that says you are on track to resolve outstanding issues with Panama and are committed to addressing issues related to Colombia, both sometime this year.

Now, some might call this progress. But are we really any closer to having these agreements before Congress today than in 2009?

I find it hard to believe that the problem is a lack of information. The problem is a lack of political will, and a lack of political courage.

So far, the administration has talked a big game on these trade agreements, but when game time rolls around, they shrink from action. At some point, despite all the words, it is the administration’s inaction that speaks volumes.

This failure to act raises strong doubts about whether the President is serious about moving these agreements at all. Given past rhetoric, the recent promises of intensified engagement, commitments to work, and being on track are all fine and good.

 But these promises are woefully inadequate.

After two years, it is still an open question whether the President will ever see fit to submit the Colombia and Panama agreements to Congress anytime in the near future, if at all.

Let me be clear. If the President will not act, I will.  

If the President ignores the will of Congress and sends the Korea agreement without Colombia and Panama I will do everything I can to make sure that those two agreements are considered at the same time as Korea.

Given the gap between promises made and promises kept, I don’t believe the President has given Congress much choice when it comes to the Colombia and Panama trade agreements.  

If we are to serve the national interest and get these two agreements approved, Congress must act with — or without — Presidential leadership.

Action without Presidential leadership is exactly what is going to happen. That will work well politically both for the divided Administration, facing a re-election while the labor union movement is under siege, and a Congress whose constituents are more focused on jobs and exports than votes in 2014.

 

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