Free Trade Agreements with Korea, Panama and Colombia: It Is Time
The National Customs Brokers and Forwarders Association of America (NCBFAA) knows first-hand the dynamic, positive impact of free trade agreements on the economy. Our members – licensed customs brokers and ocean freight forwarders – are the intermediaries at the border who facilitate imports and exports. NCBFAA members provide services to U.S.-based companies – importers and exporters participating in the highly competitive global flow of trade.
We live in a global marketplace. U.S. manufacturers source components and inputs from around the globe. U.S. companies seek to produce quality products that will be competitive in markets worldwide. That is why Congress must move ahead and pass these three Free Trade Agreements now – before more U.S. jobs are lost to global competitors.
· In the nearly four years since the U.S. and Colombia agreed to an FTA, the delay in approving the agreement has cost U.S. companies almost $3.7 billion in duties for products exported to Colombia. Yet, Colombian producers already are able to send products to the U.S. duty-free under existing preferential trade programs. The U.S.-Colombia FTA gives us the opportunity to transform this one-way relationship into a beneficial two-way street. It defies logic that this agreement has not yet been approved.
· Panama is already a great market for U.S. exports, even with an uneven playing field where U.S. products entering Panama are subject to tariffs, while most Panama products entering the U.S. receive duty-free treatment. The FTA with Panama will encourage further expansion and diversification of U.S. exports to that growing country. With a major expansion of the Panama Canal, a huge subway project in Panama City and development of the world’s 5th largest copper mine underway, the opportunities ahead for U.S. companies are extraordinary.
· The world is moving on. On July 1, 2011, the European Union Free Trade Agreement with Korea took effect, eliminating 98.7% of the Korean tariffs on EU products. U.S. companies are now at a sharp competitive disadvantage in this growing market. Similar agreements have been signed -- between Colombia and the EU, between Colombia and Canada, between Panama and Canada. How can we even pretend to be serious about boosting US exports while denying U.S. companies an equal footing in global markets?
· Added to the Colombia Free Trade Agreement is renewal of the Generalized System of Preferences (GSP), which expired December 31, 2010. The lapse of GSP costs U.S. companies nearly $2 million a day in tariffs. This has a disproportionate impact on small and medium-sized companies, who rely on suppliers in GSP countries and do not have the cash-flow to withstand the payment of these tariffs for an undetermined period.
The time has come for Congress to put politics aside. It is poor economic strategy to let these agreements languish any longer. NCBFAA urges you to vote “Yes” for the three Free Trade Agreements.
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