The Other Big Three

Neal Asbury

Neal Asbury

While Capitol Hill struggles with an aid package to bail out the Big 3 car manufacturers, there’s another “Big 3” that need attention: the Colombia, South Korea and Panama free trade agreements that are languishing in Congress. By sitting on the passage of these three important trade agreements, the U.S. economy is being deprived of thousands of U.S. jobs and delaying the drop in tariffs that could be saving billions of dollars for U.S. exporters.

On face value, the two “Big 3s” doesn’t seem to be related.  Look further and you’ll find that the U.S.-Korea Free Trade Agreement (KORUS-FTA) in particular, has special relevance to the discussion. The U.S.-Korea Free Trade Agreement (KORUS-FTA) was signed June 30, 2007. Its ratification today is held hostage by Democrats in Congress. Their stated reason for not supporting the agreement is that South Korea does not import enough U.S. cars (to placate the United Auto Workers) and restricts U.S. beef.

However, the Koreans have offered a compromise on beef that is acceptable to the U.S. beef industry and which the Democrats are ostensibly defending.  Now Detroit comes calling with hat in hand for money, when they stubbornly refuse to support the agreement that would allow them to sell more cars in South Korea.  The stumbling block?  U.S. consumers, like those in Korea, do not want to buy gas guzzling cars, but Detroit has placed the onus on Korea and not on their own stubbornness. If car execs had foreseen the need for more fuel efficient cars, sales would rise in the U.S. and Korea. This is another example of the ramifications of mismanaging trade agreements.

In Colombia, U.S. exporters have paid $1.3 billion in tariffs that could have been eliminated if the U.S. – Colombian Free Trade Agreement had been voted on by Congress.  Since more than 90 percent of Colombian products coming into the U.S. are duty free, U.S. exporters should enjoy a reciprocal agreement with Colombia. Ironically, Colombia supports the agreement and is willing to eliminate most tariffs.

The story is similar with the Panama agreement.

The Big 3 shouldn’t be given a free pass until they drop their objections to Korea and other trade agreements that could be helping their own cause while giving the U.S. economy the means to help repay their proposed loans.

By Neal Asbury

Leave A Comment