October 12, 2011 / 10:45 PM / 8 years ago

WRAPUP 4-US House OKs S.Korea, Panama, Colombia trade deals

* Proponents see job creation; critics see losses

* Korea agreement biggest US trade deal since NAFTA

* Labor concerns continue to hang over Colombia deal

By Doug Palmer

WASHINGTON, Oct 12 (Reuters) - The U.S. House of Representatives on Wednesday approved long-delayed trade pacts with South Korea, Colombia and Panama that are expected to lift exports by about $13 billion a year, clearing the way for the Senate to give a final stamp of approval.

Republicans and Democrats joined to pass the pacts, with the Colombia deal receiving the least support. The Senate is expected to pass the deals later on Wednesday.

Supporters hope the action marks an end to a long U.S. drought on deals to open trade. Each pact had been stuck at the White House for at least four years.

“We will send a strong signal to the world that America is back on the trade field,” Republican Representative Kevin Brady told a rally with business groups.

U.S. farm and manufactured goods exports are expected to rise under the agreements as tariffs are phased out. The pacts also open new markets for U.S. companies in service sectors such as banking, insurance and express delivery.

Critics such as Senator Sherrod Brown said the deals would harm U.S. employment, but the Obama administration and other proponents believe they will support tens of thousands jobs.

Brown urged Obama to turn away from “NAFTA-style” agreements like the three deals and change trade policy to “put American manufacturers and workers first.”

The biggest gains are expected from the pact with South Korea, a longtime U.S. ally and a $1 trillion economy in a region increasingly dominated by China. The agreement will help anchor the United States in the fast-growing Asia Pacific region so it can share in its growth, analysts say.

The U.S.-South Korea deal would be the biggest U.S. trade pact since the North American Free Trade Agreement that took effect in January 1994.

The action comes a day before South Korean President Lee Myung-bak speaks to a joint session of the U.S. Congress, a visit that has given lawmakers an added impetus to move the deals.

House Democratic leader Nancy Pelosi criticized Republican Speaker John Boehner for moving the three agreements but refusing to allow a vote on a recently passed Senate bill to crack down on China currency practices that she blamed for millions of lost American jobs. Boehner opposes that bill.

President Barack Obama sent the three agreements to Capitol Hill nine days ago, four to five years after they were negotiated. The deals had foundered primarily on Democratic Party concerns over labor practices abroad and the fear increased competition would cost U.S. jobs.


“It’s unfortunate that it took nearly 1,000 days for him to get these trade agreements up here, but now finally we’re going to have an opportunity to give American businesses and American farmers and ranchers a chance to grow,” said Senator John Thune, a South Dakota Republican.

U.S. farmers and big agricultural exporters are excited about new sales opportunities for beef, pork, poultry, corn, wheat, soybeans and other food products in the three markets, but they lament the long delay as a lost opportunity as other countries nailed down bilateral deals.

“We can’t underestimate how much U.S. agriculture has lost out,” while the current pacts were stalled, said Devry Boughner, director of international business relations for the food, agriculture and risk management giant Cargill.

“Corn, soybeans and wheat exports from the U.S. have gone from a 78 percent market share in the Colombian market to 28 percent, owing in part to the fact that Canada got to Colombia first,” Boughner said.

Representative David Dreier, chairman of the powerful House Rules Committee, called approval of the pacts a small step toward restoring U.S. leadership on trade.

Although Obama was slow to move the agreements, he negotiated side deals with each country to address concerns raised by Democrats and reduce opposition to the pacts.

He also insisted Congress renew a worker retraining program known as Trade Adjustment Assistance, which the House did on Wednesday along with the pacts.


In a study in 2007, the U.S. International Trade Commission estimated the U.S.-South Korea deal would lift U.S. imports from Korea to $6.9 billion a year by $6.4 billion, with gains in areas such as clothing, leather goods, footwear, electronics and cars.

A study by the labor-backed Economic Policy Institute estimates the agreement will cost about 159,000 jobs over seven years. The White House says it will help create or maintain more than 70,000, while congressional Republicans see as many as 250,000 new jobs.

All three pacts were negotiated and signed during the administration of former President George W. Bush, who was unable to win their approval from the Democratic-controlled Congress before leaving office in 2009.

The oldest and most controversial pact, the one with Colombia, was signed in November 2006 and the other two accords in mid-2007. Since then, other countries have negotiated scores of new trade agreements around the world.

A broad coalition of farm, manufactured and services industry groups have pushed for the agreements, and found a more favorable environment after the 2010 elections when Republican regained control of the House.

Ted Austell, a vice president at Boeing , said the aircraft maker expected to benefit both directly and indirectly. “When commerce increases, downstream that turns into aircraft orders. More movement of people and certainly of goods opens up more opportunity to sell aircraft,” he said.

Many Democrats say Colombia needs to do more to stop killings of trade unionists and prosecute those responsible.

The White House has pledged the agreement with Colombia will not go into force until Bogota “has successfully implemented key elements” of an action plan to address the violence.

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