(November 11, 2008) Yesterday the California Coalition for Free Trade, a California Chamber of Commerce-led coalition, sent a letter to President-Elect Barack Obama urging him to work with Congress to approve the three pending Free Trade Agreements (FTA) during the “lame duck” session over the next several weeks.

In the letter, the coalition explains that the U.S.-Colombia FTA, U.S.-Panama FTA and the U.S.-Korea FTA are all critical to consumers, workers, businesses, farmers, and ranchers in California. These job-creating trade agreements should be approved at a time when they are needed more than ever.  

U.S.-Colombia FTA

Colombia is a dynamic economy with a pro-U.S. government, and with whom U.S. trade has nearly doubled over the past four years. Over 9,000 U.S. companies export their products to Colombia and more than 85 percent of these are small and medium-sized companies. U.S. farmers and ranchers sell agricultural products to these markets, and

U.S. manufacturers are enjoying double-digit sales growth that will only grow 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 2007, California exported over $320 million to Colombia, making it California’s 39th largest export market. America’s two-way trade with Colombia reached $18 billion in 2007, making Colombia the United States' fifth largest trading partner in Latin America. Trade and investment in Colombia already sustains thousands of U.S. jobs and the FTA will only open up more opportunities.

Per the U.S. Department of Commerce, International Trade Administration, the U.S.- Colombia Free Trade Agreement offers tremendous opportunities for California's exporters. When the Agreement enters into force, 80 percent of U.S. consumer and industrial exports to Colombia, including nearly all information technology products; mining, agriculture, and construction equipment; medical and scientific equipment; auto parts; paper products; and chemicals, will be duty-free immediately. The remaining tariffs phase out over 10 years 

U.S.-Panama FTA

When the FTA enters into force, 88 percent of U.S. consumer and industrial exports to Panama, including nearly all information technology products; aircraft and related equipment; agriculture and construction equipment; medical and scientific equipment; environmental products; pharmaceuticals; fertilizers; and agro-chemicals will become duty-free immediately. The remaining tariffs phase out over 10 years. U.S. farmers and ranchers will also become much more competitive, benefiting from immediate duty-free treatment of more than 60 percent of current U.S. agriculture exports. Key U.S. agriculture exports such as high-quality beef, other meat and poultry products, soybeans, most fresh fruit and tree nuts, distilled spirits and wines, and many processed food products, will be duty-free upon entry into force of the FTA. Tariffs on most remaining U.S. farm products will be phased out within 15 years.

The U.S.-Panama FTA will ensure that California's firms can participate on a competitive basis in the $5.25 billion Panama Canal expansion project that will offer many opportunities for U.S. providers of goods and services. Ultimately, the Canal expansion will benefit California exporters by increasing the Canal's capacity, which will reduce the costs of transporting goods while keeping up with the demands of a growing global economy.

U.S.-Korea FTA

The trade agreement with Korea is another big win for the California and U.S. economies for many of the same reasons. Korea is a $1 trillion economy and is the seventh-largest U.S. export market (and California’s sixth-largest market for farm exports). In 2007, two-way trade between the two countries totaled over $82 billion and US goods exports to Korea were $34.7 billion, a steady increase over the previous five years. By giving U.S. exporters a leg up in the world's tenth-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 5th largest exporting partner. In 2007, California exported $7.5 billion to Korea.

The US-Korea FTA will greatly expand market access in Korea for US farmers, manufacturers, service providers, and financial services firms. Under the FTA, more than half of current US agricultural exports to Korea—with a value of $1.6 billion—will become duty-free immediately. Almost 95 percent of all bilateral trade in consumer and industrial products will become duty-free within three years under the agreement, and virtually all remaining tariffs on consumer and industrial goods will be eliminated in ten years.  Moreover, this agreement will eliminate significant non-tariff market access barriers in Korea to US goods, services, and investment. Consumers in both countries stand to gain from the broad benefits of this agreement.

Action Needed

The CalChamber is urging members of the business community to contact their Congressional representatives and ask them to support the U.S.-Colombia FTA, U.S.-Panama FTA and the U.S.-Korea FTA. For a sample letter visit, www.calchambervotes.com.

Staff Contact: Susanne Stirling