Trade legislation partially clears up FTA puzzles

Trade legislation partially clears up FTA puzzles The extension last week of the Andean trade agreement and the completion of new trade agreements with Panama and Colombia partially cleared up some lingering questions about the future of U.S.-Latin American trade. But congressional failure to extend presidential trade negotiation authority that expired June 30 will raise new questions concerning trade with Latin America.
   According to various news reports, Democrats on Capitol Hill are unlikely to restore trade promotion authority to President Bush before his second and last term is up in 2008. Only President Clinton lost this authority since it was established in 1975.
   TPA allows the administration to “fast track” free trade initiatives with other countries. Many Democratic lawmakers believe the Bush administration has not done enough to protect American workers from unfair overseas trade practices.
   Congress agreed to an 11th-hour extension of the Andean Trade Promotion and Drug Eradication Act before it expired Saturday, continuing for eight months the existing trade conditions for Colombia, Peru, Ecuador and Bolivia.
   Bush administration officials called the discontinuation of TPA a big mistake.
   “American workers cannot afford for us to hang up a ‘Closed for Business’ sign,” said U.S. Trade Representative Susan C. Schwab in a statement. “The United States must be in the game and not on the sidelines as other nations negotiate deals that disadvantage our businesses, farmers, ranchers and service providers.”
   Schwab said that at least 100 regional trade agreements have entered into force since 2002, and more than 100 are under negotiation.
   U.S. Agriculture Secretary Mike Johanns noted substantial benefits to agricultural commodity shippers from recent trade agreements reached by the United States. “Under trade promotion authority, we completed more than a dozen bilateral free trade agreements valuing $27 billion in agricultural exports — equivalent to over a third of our total export value in 2006,” he said.
   Overall, since TPA was last authorized in 2002, U.S. agricultural exports have increased from $53.1 billion to $68.7 billion in 2006, Johanns said.
   Various news reports on the Andean trade pact indicated that Democrats favored a two-year extension of the agreement, while Republicans wanted the eight-month extension to prevent potential conflicts with separate new trade agreements with Colombia and Peru.
   Ranking Senate Finance Committee member Chuck Grassley, R-Iowa, issued a statement that called the agreement a 'reasonable compromise' that 'gives us a window to enact the Peru and Colombia trade agreements.' He added that he is concerned about extending trade preferences for Bolivia and Ecuador based on the policies and actions of leaders in those countries.
   While the Andean trade extension and the signing last week of a trade agreement with Panama — coupled with new agreements signed earlier with Colombia and Peru — represent gains for Latin American trade, the end of the president's trade promotion authority will create new uncertainties.
   The Colombia, Peru and Panama pacts completed under TPA status should not be affected. But with Democrats in Congress generally cool toward any new trade agreements, observers feel there will probably be no new negotiations until 2009 when the next president takes office.
   That could well affect U.S. companies conducting trade in Latin America, because there are several active trade negotiations underway with other countries that compete for some of the same business. That includes negotiations between the 27-member European Union and the Mercosur trade bloc consisting of Argentina, Brazil, Paraguay, Uruguay, and Venezuela. Canada is conducting a series of trade agreements with the Caribbean Community (Caricom), as well as Andean nations and governments in Central America. China has finished a trade agreement with Chile and is in talks with Peru.
   Commerce Secretary Carlos Gutierrez expressed his concerns in a Miami Herald report: 'The world’s largest economy cannot afford to sit on the sidelines while the rest of the world benefits from increased open markets.'