Washington — Congress approved long-delayed free-trade agreements with Colombia and Panama October 12 that expand trade and commerce, reduce regulatory barriers, add jobs and enhance economic growth.
The accords were part of a series of agreements approved by Congress. In addition to the Colombia and Panama agreements, the lawmakers also passed a South Korea free-trade agreement. The three agreements together represent a significant economic package that aims to help the United States balance its economy with greater exports in the aftermath of the 2007–2009 recession, which was the steepest economic downturn since the Great Depression in the 1930s.
Secretary of State Hillary Rodham Clinton says the agreements are not just economic.
“South Korea, Colombia and Panama are three important partners in strategically vital regions,” Clinton said in an October 12 statement. “With the passage of these agreements, America has delivered for our friends and allies.”
Clinton thanked Colombian President Juan Manuel Santos, Panamanian President Ricardo Martinelli and President Lee Myung-bak of South Korea “for their patience and willingness to partner with the Obama administration as these agreements moved through Congress.”
“But our work is not yet done. We will not be content until these agreements are fully implemented,” Clinton added.
The agreements make it easier for American companies to sell their products to Colombian and Panamanian markets, creating jobs at home, but also expand trade and commercial opportunities for Colombian and Panamanian enterprises doing business in the United States.
The U.S. House of Representatives approved the U.S.-Panama Trade Promotion Agreement on a vote of 300–129, while the Senate approved the measure 77–22. The House passed the U.S.-Colombia Trade Promotion Agreement by a vote of 262–167, and the Senate voted 66–33.
Free-trade agreements are intended to reduce the cost of U.S. goods and services in foreign markets, and also reduce the cost of foreign goods and services in U.S. markets. The cost savings is achieved as a result of eliminating — usually in phases — trade tariffs, which are a form of tax on imported goods and services. By reducing prices, the trade agreements create more demand for the goods and services of those trading countries.
President Obama sent the trade measures to Congress on October 3 after they were negotiated more than four years ago by the administration of President George W. Bush. The Colombia Trade Promotion Agreement was signed by the United States and Colombia on November 22, 2006, and amended on June 28, 2007; the Panama Trade Promotion Agreement was signed on June 28, 2007.
Action was delayed on the trade measures as Congress raised concerns about the impact the accords might have on American workers and questioned the situation in Colombia. To move the process forward, the United States negotiated an Action Plan on Labor to help improve labor conditions in Colombia.
According to the U.S. Trade Representative’s office, the comprehensive Colombian trade agreement is designed to eliminate tariffs and other barriers to goods and services, promote economic growth and expand trade between the United States and Colombia.
And according to the White House, the trade accord with Panama builds on the Caribbean Basin Initiative, which has contributed to economic growth and export diversification in Panama.
“Today, Panama is one of the fastest-growing economies in the Western Hemisphere,” the White House said in a recent statement on the trade agreements. The accord reduces or eliminates tariffs between the two nations, and also contains state-of-the-art provisions to help protect intellectual property rights and reduce excessive regulations and barriers to exports and imports.
Both trade agreements contain high standards for protecting labor rights, carrying out covered environmental agreements, and ensuring that key domestic labor and environmental laws are enforced, combined with strong remedies for noncompliance, the White House said. The Colombia agreement also extends the Andean Trade Preference Act, which helps countries fighting against illegal drug production and trafficking by expanding their economic alternatives, the White House said.