In Speech, Hatch Pushes for Swift Action on Job-Creating Trade Pact With Colombia

Utah Senator Says Congressional Action on Bilateral Agreement Should Not Be Linked to Nonrelated Issues

WASHINGTON – In a speech on the Senate floor today, U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, said it is imperative the U.S.- Colombia Trade Promotion Agreement (CTPA) swiftly move through Congress free of any obstacles or linkage to other unresolved issues.

Hatch’s remarks come on the heels of a Committee hearing examining the bilateral trade pact where Administration officials signaled their interest in attaching non-related trade issues, such as the extension of Trade Adjustment Assistance (TAA) and Permanent Normal Trade Relations (PNTR) for Russia to the passage of CTPA.

Below are excerpts of Hatch’s speech:

ON LINKING TAA & PNTR TO CTPA Passage:
“It is time for the excuses to end. Resolution of unrelated issues like Trade Adjustment Assistance and PNTR for Russia should not be used as further barriers to submission of this agreement. Colombia is taking the steps laid out by the Obama Administration that the Administration has said are necessary before the President will formally submit the agreement to Congress. Once those steps are taken in June, I fully expect the Administration to finally fulfill its end of the bargain and formally submit the agreement for Congressional approval without further conditions. If not, the Administration is making a conscious decision to continue denying U.S. exporters improved access to the Colombian market, and to undermine our standing as a credible ally in Latin America.”

ON THE OBAMA ADMINISTRATION DITHERING ON SUBMITTING CTPA TO CONGRESS:
“The Obama Administration’s delay in submitting the Colombia agreement is hurting U.S. exporters. This failure is a drag on job creation and economic growth. While the President has dithered as to whether to implement the trade agreement with Colombia, our trade competitors have been more than willing to enter into agreements with Colombia. Consequently, while Colombia’s tariffs on U.S. imports have remained in place, Colombia’s tariffs on products from other countries are falling away. For example, Colombia has implemented a preferential trade agreement with Argentina and Brazil. As a result, U.S. farm products are rapidly being displaced in the Colombian market by products from those countries. So it’s not too surprising that between 2007 and 2010 U.S. agricultural exports to Colombia fell by more than half.”

ON THE ADMINISTRATION’S LABOR NEGOTIATIONS WITH COLOMBIA:
“So, the Obama Administration has now negotiated an action plan that addresses its concerns regarding the labor situation in Colombia. You would think we would have clarity that, once the steps in the action plan are fulfilled, the Administration would submit the agreement to Congress for its consideration. But we do not have this clarity. There has been no clear answer to this very simple question.”

Below is the text of Hatch’s full speech delivered on the Senate floor this afternoon:

Mr. / Mdme. President, yesterday the Finance Committee held a hearing on the U.S. – Colombia Trade Promotion Agreement. This agreement will provide significant new opportunities for U.S. manufacturers, agricultural producers, and service providers in the rapidly growing Colombian market.

Implementation of the Colombia agreement would also benefit U.S. national security. Colombia is emerging from decades of civil strife, and it is in our interests to see that Colombia continues to heal from its wounds of the past. The free trade agreement will help bring further stability to Colombia, a close friend and ally, while also opening and further building the market for U.S. exports to that country. In short, it is a good agreement for the United States.

So what’s the holdup?

Over four years have passed since the U.S. – Colombia Trade Promotion Agreement was signed. It is imperative that the Administration submits an implementing bill for this agreement to Congress, and soon. The Administration, however, still won’t say when it will send an implementing bill to Capitol Hill.

During yesterday’s hearing, I asked our Deputy U.S. Trade Representative two very simple questions regarding this issue. First, assuming that Colombia fulfills the steps outlined in the Labor Action Plan developed by the Obama Administration and the Colombian government, will the Administration submit the Colombia agreement to Congress for a vote? Second, is the Administration preconditioning the President’s formal submission of the Colombia Trade Agreement on matters not related to the action plan, such as Congressional extension of Trade Adjustment Assistance or Permanent Normal Trade Relations for Russia?

To me, these questions are pretty clear and can be answered with a simple yes or no. But unfortunately, we did not get a clear answer. After years of delay we still do not know if the Administration will ever submit the Colombia agreement to Congress for approval. This is very unfortunate.

The Obama Administration’s delay in submitting the Colombia agreement is hurting U.S. exporters. This failure is a drag on job creation and economic growth. While the President has dithered as to whether to implement the trade agreement with Colombia, our trade competitors have been more than willing to enter into agreements with Colombia. Consequently, while Colombia’s tariffs on U.S. imports have remained in place, Colombia’s tariffs on products from other countries are falling away. For example, Colombia has implemented a preferential trade agreement with Argentina and Brazil. As a result, U.S. farm products are rapidly being displaced in the Colombian market by products from those countries. So it’s not too surprising that between 2007 and 2010 U.S. agricultural exports to Colombia fell by more than half.

And it looks like matters will get even worse. A Montana wheat grower who testified at yesterday’s hearing noted that the U.S. share of Colombia’s wheat market fell from 73 percent in 2008 to 43 percent in 2010. He also stated that following implementation of the Canada – Colombia free trade agreement, which is expected to occur this year, U.S. exports of wheat to Colombia will drop to zero unless the United States implements its trade agreement with Colombia.

So U.S. agricultural exports to Colombia are already falling. U.S. manufactured goods and U.S. services will be next.

It doesn’t have to be this way. We don’t have to continue giving away the growing Colombian market to our competitors. If we want to boost our exports to Colombia, all we have to do is implement the U.S. – Colombia Trade Promotion Agreement.

The Obama Administration had earlier stated that it wanted to address Colombia’s internal labor situation before moving ahead with the agreement. But the Administration delayed taking any meaningful steps to address their concerns with the Colombia government for years. Just a few months ago the Administration finally got serious about engaging with Colombia. And, low and behold, in a matter of weeks they were able to develop a Labor Action Plan that addressed their concerns in a meaningful and concrete way. The Administration discovered that, in their own words they had a willing partner in Colombia. The fact of the matter is that Colombia has been taking steps for years to address issues related to violence against unionists and has always been willing to do more. Why it took the Administration so long to figure it out is a mystery to me.

So, the Obama Administration has now negotiated an action plan that addresses its concerns regarding the labor situation in Colombia. You would think we would have clarity that, once the steps in the action plan are fulfilled, the Administration would submit the agreement to Congress for its consideration. But we do not have this clarity. There has been no clear answer to this very simple question.

Instead, there seem to be more preconditions on submitting the agreement that are not even related to the agreement itself, such as extension of trade adjustment assistance and permanent normal trade relations for Russia.

This is very odd. Most economists would agree that there are likely to be very few workers who will lose their jobs because of implementation of the Colombia trade agreement. After all, the U.S. – Colombia trade agreement will result in almost no growth in imports from Colombia. This is the case as almost all Colombian products have entered the United States duty-free over the past two decades on account of U.S. trade preference programs. In contrast, Colombia’s average applied tariff on U.S. imports is over 12 percent, and they can reach as high as 388 percent.

Moreover, the administration itself testified that implementation of the Colombia agreement: will expand exports of U.S. goods to Colombia by more than a billion dollars; increase U.S. GDP by $2.5 billion; and support thousands of additional jobs for our workers. So, it is hard to see further extension of the TAA program as a necessary precondition for approval of an agreement that will help our economy and support jobs in the United States.

I am also bewildered by any attempts to precondition submission of the Colombia agreement to congressional support for Permanent Normal Trade Relations for Russia. These two issues are totally unrelated. Given the current disregard for the rule of law and the many trade problems that persist in Russia today, it is hard to argue that the time is ripe for Congress to grant Russia permanent normal trade relations.

Moreover, it would be particularly ironic, and sad, to condition passage of the Colombia trade agreement with permanent normal trade relations for Russia. Over the past four years, Colombia has been a reliable U.S. trading partner, ready and willing to remove its tariffs on U.S. imports through implementation of our trade agreement. During these same years, Russia has seemingly gone out of its way on numerous occasions to prove to the United States that it is an unreliable trading partner.

It is fundamentally unfair to continue to treat a friend and ally like Colombia in this way. Unfortunately, it is not the first time Democratic leaders have put one of our closest Latin American allies in this position. The U.S.-Colombia Trade Promotion Agreement was first signed on November 22, 2006. Democratic leaders refused to consider the agreement until their additional demands were met on labor, the environment and intellectual property. The Bush Administration responded by working with then Speaker Pelosi on a package of changes that were understood would lead to consideration of the agreement. But once they had these changes in hand, the Democratic leadership in the House balked, citing yet more issues that had to be resolved. When President Bush submitted the Colombia agreement to Congress for its consideration utilizing Trade Promotion Authority procedures in April 2008, the Democratic leadership refused to allow the agreement to come up for a vote. Instead, they changed the rules, and the agreement has since languished for years.

It is time for the excuses to end. Resolution of unrelated issues like Trade Adjustment Assistance and PNTR for Russia should not be used as further barriers to submission of this agreement. Colombia is taking the steps laid out by the Obama Administration that the Administration has said are necessary before the President will formally submit the agreement to Congress. Once those steps are taken in June, I fully expect the Administration to finally fulfill its end of the bargain and formally submit the agreement for Congressional approval without further conditions. If not, the Administration is making a conscious decision to continue denying U.S. exporters improved access to the Colombian market, and to undermine our standing as a credible ally in Latin America.

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