Obama Will Act on Pending U.S. Trade Pacts, Kirk Says

The U.S. will seek to complete changes to trade agreements with Colombia and Panama this year and submit the deals to Congress, U.S. Trade Representative Ron Kirk said today.

President Barack Obama “has directed me to immediately intensify engagement with Colombia and Panama with the objective of resolving the outstanding issues as soon as possible this year,” Kirk told the House Ways and Means Committee. “Hopefully it won’t be much longer.”

Obama will submit a free-trade deal with South Korea, which the administration reworked at the end of last year, to Congress in coming weeks, Kirk said. That action sets off a mandatory schedule for congressional action.

Republican leaders in Congress have praised Obama for pursuing the South Korea agreement while complaining that the similar pacts with Colombia and Panama have languished.

“Frankly, these kinds of statements I would have expected two years ago,” House Ways and Means Committee Chairman Dave Camp, a Michigan Republican, said today in a speech in Washington before the hearing. “The president’s unwillingness to engage, especially on Colombia, has ground everything else to a halt.”

Camp blamed the delay by the administration for the House of Representatives’ inability to pass a measure yesterday to extend trade preferences for Andean nations and benefits for workers who lost their jobs because of overseas competition.

Korea, Panama, Colombia

The free-trade agreements with South Korea, Panama and Colombia all were signed during the administration of President George W. Bush and weren’t approved by Congress. Kirk has said the pacts needed changes in order to gain the support needed in Congress and among voters.

In addition to the free-trade agreements, the administration will work with Congress “this year to grant Russia Permanent Normal Trade Relations, so that U.S. firms and workers fully benefit from Russia’s accession to the WTO,” Kirk said in his testimony.

Russia is trying to join the World Trade Organization by midyear, Economy Minister Elvira Nabiullina said Dec. 8. In order for the U.S. companies to get the tariff cuts Russia will subscribe to, the U.S. must repeal a Cold War-era law inhibiting full market opening.

Rising Trade

South Korea is the biggest prize for U.S. companies, as trade with that nation topped $80 billion in the first 11 months of 2010, compared with $29 billion for Russia, $25 billion for Colombia and $5.8 billion for Panama, according to U.S. Commerce Department data. The South Korean deal would increase U.S. exports by $10.9 billion a year, while the accord with Colombia would boost exports by $1.1 billion, according to the U.S. International Trade Commission.

Democrats in Congress say Colombia needs to do a better job guaranteeing labor rights and protecting union organizers from violence.

“This is a little bit different than Korea, where we were addressing market-access issues,” Kirk said today. “Colombia and Panama have begun to take important steps, but more remains to be done.”

Kirk said he is sending a team of officials to Colombia next week to begin their consultations: “We will be consulting closely with you and major stakeholders -- including labor and human rights groups -- throughout this process.”

Union Opposition

Unions, which helped fund the election campaigns of Obama and Democrats in Congress, are united in opposition to the Colombia pact because of longstanding concern about violence against labor organizers. While the AFL-CIO, the largest U.S. labor federation, opposes the Korea deal as well, the United Auto Workers endorsed that agreement after Obama won concessions intended to open Korea’s market to American autos.

Republicans questioned today whether Kirk’s statement that he would attempt to reach deals with the two Latin American nations was anything new. California Republican Wally Herger compiled a list of similar statements from Kirk or Obama over the past two years saying they would work to rework the pact.

“We need to move all three of these in the first six months of this year,” Representative Kevin Brady, a Texas Republican and chairman of the panel’s trade subcommittee, said today. “This is about ensuring that America doesn’t further embarrass itself.”

Brady said Republicans in Congress would not allow a vote on Russia’s WTO bid before voting on Colombia or Panama.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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