Alliance of Americans for America

Obama Signs Trade Pact

By Doug Palmer

WASHINGTON | Fri Oct 21, 2011 3:46pm EDT

WASHINGTON (Reuters) - President Barack Obama signed three free trade deals opposed by many of his fellow Democrats in a low-key ceremony on Friday, capping a five-year push by Republicans to get them approved.

The pacts with South Korea, Panama and Colombia are expected to boost U.S. exports by around $13 billion annually, which the administration estimates will create or maintain about 70,000 jobs -- a figure disputed by labor groups including the politically influential AFL-CIO.

Obama signed the agreements in the Oval Office surrounded by lawmakers, business leaders and foreign dignitaries, but outside the view of television cameras and reporters. He also scrubbed plans to speak publicly about the pacts at a reception in the White House's Rose Garden.

"This may be the high-water mark for the president's trade policy, certainly in his first term," said Dan Griswold, director of the free-market Cato Institute's Center for Trade Policy Studies.

Obama is unlikely to launch major new trade negotiations next year when he is up for re-election "because it's not popular with key constituencies of his," Griswold said.

Earlier this week, the White House said Obama would talk publicly about the agreements at a Rose Garden reception on Friday. But it later decided to keep that gathering private, despite Obama's recent emphasis on the need to create jobs to bring down stubbornly high unemployment.

The president faced fierce opposition to the three trade agreements from many Democrats, which prompted him to negotiate side deals with the three countries to address their concerns.

That strategy paid off when the Senate and the House of Representatives passed all three pacts last week with bipartisan support.

But the approval strained relations between the White House and the 12.2-million-member AFL-CIO.

"They will contribute to the loss of hundreds of thousands of American jobs at a time when workers are still trying to dig out of a large hole," said Amaya Tune, a spokeswoman for the group.

The labor-backed Economic Policy Institute has estimated the Korea agreement alone will cost 159,000 jobs.

Republicans contend the White House estimate of 70,000 new jobs from the deals is too conservative and put the figure closer to 250,000.


The White House's handling of the signing ceremony left many trade specialists scratching their heads.

"To the foreigners and insiders on trade, it wants the credit it deserves for getting the job done," while trying to conceal itself from the broader public debate about trade, said R.K. "Judge" Morris, president of the Global Business Dialogue.

The deals were negotiated during President George W. Bush's Republican administration and are still unpopular with most House Democrats. But Republicans, who pushed hard for the agreements after winning control of the House last November, celebrated the signings as a long-overdue victory.

"Finally, we are sending a signal to our competitors and allies alike that the United States is committed to a robust trade agenda that levels the playing field for American workers, consumers, and businesses and creates new markets for our goods and services," House Ways and Means Committee Chairman Dave Camp said.

The pact with Korea, which only 59 of 192 House Democrats supported, is the largest U.S. trade deal since the 1994 North American Free Trade Agreement and accounts for most of the expected growth in U.S. exports.

It immediately eliminates duties on over two-thirds of current farm exports to the long-time Asian ally and phases out South Korean duties on over 95 percent of U.S. industrial and consumer goods within five years.

It also gives American companies such as Citigroup, Goldman Sachs, FedEx, UPS and MetLife, increased access to South Korea's $580 billion services market.

Colombia and Panama have had duty-free access to the United States for most of their goods under long-time U.S. trade preference programs. The U.S. trade deal levels the playing field by eliminating most of the duties those countries now impose on American farm and manufacturing goods.

Manufacturers such as Boeing and Caterpillar were strong advocates of all three agreements, and U.S. wheat, corn, soybean, pork and beef producers also collectively expect billions of dollars of new sales under the accords.

House Democrats voted against the Colombia agreement 158-31 and the Panama pact 123-66. Many Democrats believe Colombia has not done enough to stop killings of trade unionists and to prosecute those responsible for the crimes.

The Obama administration negotiated a plan with Colombia to address those concerns, and has said it will not put the accord into force until Bogota has fulfilled all of its commitments under the labor plan.

The White House also won some Democratic support for the Korean agreement by negotiating more favorable auto provisions. The Treasury Department negotiated a tax information exchange treaty with Panama to address concerns about U.S. citizens using its bank secrecy laws to avoid paying taxes.

(Additional reporting by Alister Bull; editing by Xavier Briand)

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