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October 1, 2011 in Opinion
Guest opinion: Free trade will bring jobs
At a time when Republicans and Democrats in the other Washington can’t seem to agree on anything, there’s a job-creation proposal that is strongly supported by both sides of the aisle: the pending free trade agreements with South Korea, Panama and Colombia.
Even more important for Washington’s farm communities, these agreements would not only create jobs across the state, but would also increase the competitiveness of Washington agricultural products overseas. So it is vital that our state’s residents come together and advocate for swift passage of these agreements to boost to our economy.
Washington’s agricultural industry is not only one of our state’s most significant economic drivers – contributing 12 percent of the state’s economy and employing 160,000 people – but agriculture is also one of our largest international trade industries. In 2009, agricultural exports totaled $2.9 billion, making it our state’s third largest export after airplanes and software. Yet, in some of the most important emerging markets around the world – from Asia to South America – our farm products are at a competitive disadvantage due to high tariffs charged on U.S. imports.
For example, South Korea currently charges a 24 percent tariff on sweet cherries, an 18 percent tariff on potatoes, and a 15 percent tariff on U.S. wines. U.S. pear and apple exports to Colombia currently face a 15 percent tariff. More importantly, our products are becoming increasingly expensive relative to other countries’ agricultural goods. As of July 1, the European Union-Korea Free Trade Agreement was enacted. The Canada-Colombia Free Trade Agreement went into effect on Aug. 15. The costs of delay in passing our own free trade agreements with these countries are significant, with every day bringing increased losses due to trade diversion.
The American Farm Bureau Federation estimates that the passage of these agreements would increase direct exports from Washington state by $52.8 million per year, with significant job creation for Washington residents. Tariffs on many Washington agricultural products would be eliminated immediately, and a majority of tariffs will go to zero within three to five years. The benefits would be widespread, ranging from fruits, vegetables, nuts and wheat to beef, dairy, seafood and wine.
Of course, these free trade agreements would grow our state’s economy more broadly than just agriculture, lowering or eliminating tariffs on everything from industrial products to consumer goods in some of the most important markets for our state. In 2010, South Korea was Washington’s fourth largest export market, with sales of nearly $1.9 billion, while trade with Colombia and Panama totaled close to $400 million in exports last year — an increase of 180 percent over 2009. So not only are these agreements something that Democrats and Republicans in Congress both endorse, but they are also mutually beneficial to industries across Western and Eastern Washington.
The Washington Council on International Trade and the Washington Farm Bureau are working closely with our members to ensure that Washington’s congressional delegation understands how essential the immediate passage of these free trade agreements is to our state. But we need more voices to add to the urgency, explaining why these agreements are so critical, and why they must be approved as soon as possible.
An estimated one in three jobs in our state is dependent on international trade. Supporting passage of these free trade agreements will help families across Washington and grow our agricultural economy at the same time. We encourage you to join us in contacting your member of Congress and the Obama administration, urging them to come to resolution on these proposals and help create the jobs that Washington’s economy desperately needs.
Steve Appel is the president of the Washington Farm Bureau, a voluntary, nonpartisan, grass-roots advocacy organization representing the social and economic interests of its 40,000-member farm and ranch families at the local, state and national levels. Eric Schinfeld is the president of the Washington Council on International Trade (WCIT), which is dedicated to growingthe state’s economy through public policies favorable to expanded opportunities in the global marketplace.
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greyhound2 on October 01 at 5:52 a.m.
These free trade agreements are not free. The horrible job done by American leadership in negotiating ridicious trade agreements have cost about 2 million American jobs. We don’t need free trade, we need fair trade.
Hilltowner on October 01 at 8:36 a.m.
Pending free trade agreements with Korea, Colombia and Panama are bad for Washington farmers and must be rejected if we are to preserve our way of life.
All three trade treaties are based on NAFTA-style policies which have displaced American farmers while sending jobs that support Washington’s rural communities offshore. In fact our leading export is jobs and we reward companies that outsource jobs. Since NAFTA took effect, the United States has lost 300,000 farms and millions of jobs.
Major commodity groups and agribusiness organizations are making dubious claims that there will be massive export gains for farm products as a result of these free trade agreements (FTAs). The American Farm Bureau Federation Farm has released a study that estimates the Korea FTA would result in $1.65 billion in additional U.S. agricultural sales - but the Farm Bureau’s figures only look at gross exports while never including expanded imports. Net trade is what matters. The Farm Bureau’s fuzzy math also arbitrarily assumes an automatic 10 percent increase (a figure pulled out of thin air) for U.S. market share in Korea for every American agricultural sector, despite a finding from the U.S. International Trade Commission (USITC) that says corn, soybeans and wheat would be net losers, and rice is not even covered in the Korea FTA. The USITC projects many American agricultural sectors would face a worsening trade balance were the FTA to be implemented. This is a very serious manipulation.
Loopholes in the FTAs rules-of-origin promote “leakage”, so countries such as China and Vietnam are allowed to gain at our expense. Since only 35% of a product’s value must be added in Korea, there is a major trans-shipment risk from China in processed foods. Tons of contaminated Chinese honey is already flowing into the U.S. and we should not be allowing food processed in the U.S. or Korea but grown elsewhere to get FTA benefits such as the duty-free access provided by the deal.
Washington cattle and beef producers will also be harmed by these FTAs. The U.S. has NAFTA-style trade deals with 17 other nations, and our cumulative trade deficit in cattle and beef is twice as high with these 17 countries as it is with the rest of the world. Over the past 30 years, more than half a million beef ranchers have left the industry as large meatpackers have reaped the benefits of these flawed trade agreements.
Finally, all three FTAs weaken American sovereignty. Foreign investors and foreign corporations would be able to challenge state and federal laws before unelected, unaccountable international tribunals. The American taxpayer would have no rights of due process, and we’d be on the hook to pay compensation for claimed trade pact violations.
We see how this works with the recent World Trade Organization ruling striking down the U.S. country of origin labeling law. That law – approved by the U.S. Congress – lets consumers know where the food they eat is grown. The Canadian and Mexican governments challenged it, saying it gives food grown in the U.S.A. an unfair advantage over imports. If the ruling stands, the will of the American people will be nullified by anonymous bureaucrats in Geneva, and American citizens could be asked to pay “damages” to foreign agribusinesses “hurt” by our country-of-origin laws.
Washington’s congressional delegation should reject these badly flawed trade deals. America’s farmers and working families deserve fair trade and a fair shake, not the continued attack on our way of life that these pacts represent.
Dazzeetrader11 on October 01 at 4:17 p.m.
SOunded like a good deal initially. BUT as Grey says, the leadership and controls have been absolutely abysmal. CLinton , as usual, must have been busy in “other” areas.
Anymore, when free trade means $1 hr jobs elswhere, factories move…when the union get too obnozious , we move…like I have.
Something better for companies AND for workers must be generated. SO far, it’s been terrible for one side and wonderful for the companies in terms of making money.
We need to protect our shores , our workers and our companies…something Obama just doesn’t have the brain for.
Antibusinees and prounion sillyness..won’t help.
When it comes to food, we should be keeping ours. Right now, farmers are too much protected. US pays them whether anything is produced or not. Whether it’s sold elsewhere or not.
Obviously Obama and the Dems are not going to get any of this done. We need a new president and a pro business AND Pro worker congress. Right now…it’s out of control. I guess the Dems wanted the votes but not the responsibility to manage the free trade agreements.
greyhound2 on October 02 at 10:46 a.m.
The current tariff on Chinese goods imported into the United States is 2.5%.
The current tariff on United States goods imported into China is 25%.
Chinese workers are paid about 50 cents per hour, or $20 per week. Even at minimum wage (the amount even the government feels is cruel and unusual punishment) runs about $8 per hour, or $320 per week.
We haven’t even touched currency manupilation, theft of intellectual property or a host of other items. And you wonder why the Chinese are winning the trade war! Globalization is just union busting by the American corporate capitalists. The American public was never given a chance to vote on NAFTA and a host of other ridiculous trade agreements negotiated by bought and paid for legislators. They are in violation of the social contract.