Is free trade fair trade? Leaders have different ideas about pacts with Colombia, Panama, South Korea

By Kathryn Lynch-Morin

From © The Saginaw News

MIDLAND — Global competition has local companies looking for a competitive edge.

Some federal lawmakers and area business leaders say approval of pending free trade agreements with Colombia, Panama and South Korea could increase revenue and create jobs regionally and across the country. Others aren’t convinced.

U.S. Rep. Dave Camp, R-Midland, is advocating for trade agreements with the three countries; negotiations have been stalled since 2006.

“Our failure to act risks losing market share in these countries to foreign competitors and falling further behind,” Camp said.

Camp, who represents Midland County and part of Saginaw County, said the Saginaw and Saginaw Township metropolitan area alone has experienced strong growth in exports, citing data from the U.S. Department of Commerce that shows an increase from $916 million in 2005 to $1.32 billion in 2008.

He estimates 70,000 jobs could be created nationally by the trade agreement with South Korea, and backers of the pact with Colombia say U.S. exports to Colombia could increase by at least $1 billion a year.

But U.S. Rep. Dale Kildee, D-Flint, is cautious. Kildee said he has a track record of voting against trade agreements that create unfair competition.

"For my 34 years in Congress, I have fought against unfair trade agreements that tip the scales against our workers and manufacturing communities,” Kildee said.

“I am concerned that the U.S.-Korea Free Trade Agreement and other pending free trade agreements have the same defects that the other (agreements) have had and that there is not adequate enforcement. I would never support a free trade agreement that does not promote fair trade and protect American workers from unfair competition,” he said.

Some area businesses support the trade agreements.

Rebecca Cox, vice president of operations and finance for the Midland-based Savant Group, said some of the world’s fastest growing markets are in Asia, Central America and South America, and continued trade barriers with them could be detrimental to Savant’s growth.

Savant, a group of four companies including Savant Inc., Tannas Co., King Refrigeration and The Institute of Materials, provides products and testing services to the automotive and lubricant industry. Together, they are seeing growing demand from the countries in question, Cox said.
 
“We need to make sure we can be competitive,” Cox said. “If we are up against manufacturers from Europe or Asia, it’s very difficult for us to be price competitive because right off the start we have these tariffs our competitors don’t have.”

Cox said the approval of the agreements “absolutely could” create jobs at Savant, which currently has 43 employees, five of which were hired in the past nine months.

“We look at it and ask how much more could we grow if we weren’t constantly up against these barriers,” she said.
 
Savant employs a local work force to produce products and instruments at its Midland facility, Cox said.

“We are importing income and jobs to this region,” she said. “But if we don’t get rid of these barriers, that competitive country we were neck and neck with before will have another advantage over us.”

The European Union has 26 trade agreements in the works, and its agreement with South Korea is expected to take effect July 1, while a Canada-Colombia trade deal is also expected to take effect July 1.

The Michigan Farm Bureau is among those urging Congress to act on the U.S. trade agreements, estimating farmers would see nearly $2.5 billion in additional agricultural exports.
 
Ryan Findlay, Michigan Farm Bureau’s national legislative counsel, said just about any commodity produced in Michigan could benefit from one of the three trade agreements, either directly or indirectly. Michigan dairy, dry bean or wheat farmers might send their products directly to Colombia or Panama, while Michigan beef producers might help fill a void should other states send beef to South Korea, Findlay said.

The trade agreements would eliminate tariffs on U.S. exports, either immediately or over time, and help level the playing field by giving the U.S. the same duty-free access the countries have in doing business with America.

“We want to be able to export to these new markets because they bring value and allow us to grow and create jobs here in Michigan,” Findlay said. “By not passing the three trade agreements, we are losing an opportunity, not just right now but compounded in the future, and that adds up to a lot of jobs and a lot of money.”