(January 18, 2008) The California Chamber of Commerce is urging members to send letters to the California congressional delegation supporting the three free trade agreements (FTA) pending before the U.S. Congress.
Congressional leaders of both parties have indicated their intent to bring these agreements with Colombia, Panama and Korea to a vote in the months ahead, and it is critical to companies, workers, farmers and ranchers in the state that the delegation support these job-creating trade agreements.
California is one of the 10 largest economies in the world with a gross state product of approximately $1.7 trillion. As one of the largest exporting states, with exports to 225 countries around the world, international-related commerce accounts for approximately one-quarter of California's economy.
Colombia and Panama
The Latin American agreements will be on the congressional agenda first. Colombia and Panama are dynamic economies with pro-U.S. governments, and U.S. trade with these countries has nearly doubled over the last four years. More than 19,500 U.S. companies export their products to Colombia and Panama, and more than 80 percent of these are small and medium-sized companies. U.S. farmers and ranchers sell more than a billion dollars worth of agricultural products to these markets. U.S. manufacturers are enjoying double-digit sales growth. That growth will only continue when the tariffs are removed.
A U.S.-Colombia FTA will increase momentum toward lowering trade barriers and set a positive example for other small economies in the Western Hemisphere. In 2006, California exported more than $200 million to Colombia, making it California’s 43rd largest export market.
The U.S.-Colombia FTA was presented to the Colombian national congress in December 2006.
Panama has the highest GDP per capita in Central America. Its economy is based largely on the services sector, which accounts for nearly 80 percent of the GDP.
Services include the Panama Canal, banking, insurance, container ports, and medical and health. Panama has been hailed for the strong growth in its economy and its commitment to fighting corruption, combating narco-trafficking and promoting democracy. In 2006, the United States had a trade surplus with Panama, with exports totaling $2.7 billion and imports slightly under $400 million. California exports to Panama totaled $221 million, making it Calfiornia’s 42nd largest export market.
Korea
The trade agreement with Korea is another big win for the California and U.S. economies. Korea is the seventh-largest U.S. export market in the world and California’s sixth-largest market for farm exports. In 2006, U.S. exports to Korea reached $43 billion, with U.S. small and medium-sized companies accounting for a third of this impressive total.
By giving U.S. exporters a leg up in the world's 10th-largest economy, the agreement with Korea will enhance the ability of U.S. companies to compete in the dynamic Asian economy. Korea is California's fifth largest exporting partner. In 2006, California exported goods worth $7 billion to Korea.
Action Needed
The CalChamber, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad, and elimination of disincentives that impede the international competitiveness of California business.
A sample letter is available at www.calchambervotes.com.
Staff Contact: Susanne Stirling
Additional Materials
International Trade