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US Making Progress On Stalled Trade Agreements, Says Kirk

by Leroy Baker, Tax-News.com, New York

21 May 2009


United States Trade Representative Ron Kirk has said that the administration is seeking to finalize the free trade agreement with Panama while working to resolve outstanding issues blocking the path towards full ratification of trade agreements with Colombia and South Korea.

“On Panama, it’s no secret that we’ve been working very hard with the Panamanian government in recent weeks to resolve outstanding issues so that this free trade agreement can be sent up to our Congress for consideration,” Kirk disclosed in a speech to the US Chamber of Commerce. “That is why this administration is working to finish agreements in process, and seeking new opportunities for the future to open significant markets for US business and workers.”

Kirk added that the US government has had “very productive discussions” with Panama on the issues delaying Congressional approval of the FTA, namely tax transparency and labor rights.

The US/Panama FTA was signed by former President Bush in June 2007, and ratified by Panama's legislature the following month. However, the treaty cannot go into effect until it is approved by US lawmakers and ratification has stalled since the Democrats gained control of Congress that same year. Rep. Charles Rangel, the New York Democrat who chairs the influential House Ways and Means Committee, which has jurisdiction over tax and trade laws, indicated in March that Congress would not consider the free trade deal until “the tax haven issue” has been resolved.

Almost all (96%) of Panama's exports to the US already enter the country duty-free. Under the trade agreement, over 88% of US exports of consumer and industrial goods to Panama will become duty-free immediately, with remaining tariffs phased out over 10 years.

Of the free trade agreement with Colombia, which was first signed in 2006 but has similarly stalled on US concerns over labor standards, Kirk said that he was conducting a “thorough review” of the text, but that this was a work “actively in progress.”

“I have had very productive meetings with (Colombian) Trade Minister Plata toward that end, and our USTR team is actively engaging with stakeholders here in the United States to get their perspectives,” Kirk revealed. “If a US-Colombia trade agreement is done well, it can provide a strong incentive for Colombia and other countries seeking to diversify their economies beyond the drug trade that plagues a number of nations across the Americas – even as we open up a significant new market for US exporters.”

The third – and most economically significant – stalled free trade deal is that with Korea, and Kirk told the Chamber members that this agreement could serve as a launching pad for future discussions with Asian economies on trade, signalling a further softening of the Obama camp's attitude towards free trade.

“The US-Korea Free Trade Agreement has the potential to bring significant economic and strategic benefits to both countries, while demonstrating the US commitment to expanding our economic engagement and leadership in Asia,” Kirk said, adding that he had had “a very candid and productive discussion” with Korean Trade Minister Kim Jong-hoon during a recent meeting. However, he cautioned that “domestic political concerns” must be addressed in both countries before the agreement can be progressed.

Kirk also indicated that the Obama administration is keen to seek a way forward on the Doha Development Round of World Trade Organization talks.

“President Obama and I are committed to a successful conclusion of the Doha round, to revive confidence in global trade and lay the groundwork for the robust trading system of tomorrow,” he said, going on to add: “To the United States, success at Doha means a balanced and ambitious agreement with meaningful market access gains for all involved.”

Kirk’s remarks were welcomed by the National Foreign Trade Council, which represents several hundred US multinational companies and campaigns for an open, rules-based globally trading system.

"NFTC supports the Administration’s path forward on trade, including its attempt to secure meaningful market access as part of a Doha agreement and concluding free trade agreements with Panama, Colombia and Korea,” said NFTC Vice President for Global Trade Issues Jake Colvin. “We applaud the administration’s intention to engage all stakeholders on trade, including those Americans who are more skeptical of the benefits and aware of the costs.”


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