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Special Report
Holding Trade Deals Hostage
Yet another way Obama is blocking job growth.
Should American families pop open a bottle of wine to celebrate a debt-ceiling deal, presuming we get one, the wine of choice probably would be Californian. More than 60 percent of the wine consumed in the United States is from a California vineyard, according to the Wine Institute, a trade group. Should South Korean families pop open a bottle to celebrate that nation’s first-ever free trade deal with the United States, presuming we get one, the wine of choice is more likely to be French or Italian, even though the United States is the third-largest exporter to South Korea, behind China and Japan. That’s because, as of July 1, there are no tariffs on European wine imported to South Korea. American wine? Big tariffs.
July 1 was the date the EU’s free trade deal with South Korea took effect. In the first two weeks of July, EU imports to South Korea rose by 16 percent, South Korean Ambassador to the United States Han Duk-suu told me on Monday. Right now, Han said, South Korean restaurants, hotels, and merchants are negotiating multi-year contracts for wine purchases. California wineries suddenly are at a distinct disadvantage, as their wines come with the added cost of import duties. That same disadvantage is shared by all American exporters, but not by European ones.
How did Europe beat us to a free trade deal with South Korea, one of the booming economies of East Asia? President Bush signed a free-trade agreement with South Korea in 2007. It, and deals he negotiated with Colombia in 2006 and Panama in 2007, have been sitting dormant ever since. They should have been ratified well before July 1 of this year. But Congressional Democrats objected during the Bush presidency, saying the South Korea deal didn’t open South Korea enough for U.S. auto and beef producers. President Obama renegotiated the deal last December, improving it for car makers and beef producers. But he hasn’t submitted it to Congress.
You wouldn’t know that from listening to the president, though. On July 15, President Obama said, “I’ve got three trade deals, sitting ready to go. These are all trade deals that Republicans told me were their top priorities. They told me this would be one of the best job creators we could have. And yet it’s still being held up because some folks don’t want to provide Trade Adjustment Assistance to people who may be displaced as a consequence of trade. Surely we can come up with a compromise to solve those problems.”
Oh, those sinister Republicans. What Obama did not say is that he has not submitted any of the trade deals to Congress. How can Republicans be holding up trade deals they cannot even vote on because the President hasn’t submitted them?
The president is the one holding up the deals to try to extract an expansion of Trade Adjustment Assistance from Republicans, who want to pass the trade agreements and have asked the president to submit them. Republicans want all three deals — South Korea, Panama, and Colombia — at once. Politically, that would be easier for some members of Congress who might have industries in their districts that fear competition with one of the three countries. It also prevents the United States from sending the signal that one of the countries is more important than another, though in reality the South Korea deal would be America’s largest free-trade deal since NAFTA.
But Obama would not do that when Republicans asked earlier this year. Nor would he submit them unless Republicans agreed to expand TAA, which funds job training and other benefits for Americans who lose their jobs because of foreign trade, at the same time. That program has existed since 1962. But it was expanded as part of the stimulus bill. It still exists, but Obama wants to make permanent the stimulus expansion. To get that, he is holding up all three trade deals.
On Wednesday, there was a breakthrough, the Wall Street Journal reported. Administration and congressional sources said there was a tentative deal to get the trade deals and the TAA expansion passed in September, after Congress’s August recess. That would be more than two months after the EU’s free trade pact took effect.
The longer it takes to get these deals done, the longer European companies have to gain market share in South Korea. The president, in his insistence on expanding TAA to benefit his union financiers, has hurt American businesses by putting them at a distinct competitive disadvantage.
About the Author
Andrew Cline is editorial page editor of the New Hampshire Union Leader. His Twitter ID is @Drewhampshire.
Letter to the Editor View all comments (30) | Leave a comment
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Mimi| 7.28.11 @ 7:13AM
Sounds like just more PARTY over COUNTRY from this President!
Kurt in S.L.C.| 7.28.11 @ 7:59AM
Actually it's more like UNIONS over both PARTY and COUNTRY. While only about 15-20% of Democrats are union members we all know that some Democrats are more equal than others.
Aces and Eights| 7.28.11 @ 10:31AM
Unions/Party. Two left wings of the same lopsided bird.
SpiralArchitect| 7.28.11 @ 12:34PM
Wrong. This is all & only about Obummer. Nothing trumps him. Everything else is a tool, his means to (his) end (goal).
Simple really.
tsd| 7.28.11 @ 7:57AM
And why would anyone want to re-elect this guy? Well maybe if you are a union boss, but really, who else? OK, if you are taking hand out's or he is bailing you out. I guess my point is it seems if you work, earn, own property and pay tax's he just want to drill you into the ground.
Aces and Eights| 7.28.11 @ 10:40AM
Quote from a woman in Chicago, standing in line to receive a Federal check, when asked where the money came from, "From Obama." Where did Obama get the money? "I don't know, from his STASH!" and, "That's why we elected him! Obama! Obama! Obama!"
"President" is related to "preside" and comes from the Latin "praesidium" which means to stand in front of. O'Bozo needs to stand in front and take credit for what is successful and assign blame for what isn't. He likes the power and prestige of office. It satiates his gargantuan ego. People like Obama, Clinton, and most other Roman Senators, live for the cheering throngs of people, the crowds who celebrate their status as "special people." They are the scum of the Earth who destroy the wealth of others just to celebrate themselves.
SpiralArchitect| 7.28.11 @ 12:35PM
That's 1/2 of the nation you just outlined in one sentence, careful.
Elgordo| 7.28.11 @ 7:58AM
EXPOSE THE RED STATES DEM SENATORS WHO SIGNED REID'S D.O.A. LETTER......
There are 11 vulnerable Dem Senate seats up for re-election in Red States or states that went Republican in 2010.......6 of these Senators are especially vulnerable: ; Ben Nelson of Nebr. Bill Nelson of FL, Claire McCaskill of MO., Jon Tester of Mont., and from the coal rich states of W.Va. and PA. respectively, Joe Manchin and Robt. Casey..... In other states such as Wisc., VA., No. Dak., New Mex., Hawaii., their Dem Senators, many sensing defeat, are retiring. Also NJ's Gov. Christie is making voting for Republicans more popular in the Garden State , so their Dem Senator in 2012, Robt. Menendez, may also be vulnerable. ......The names of these vulnerable Dem Senators should be revealed as having signed Sen. Reid's Dead on Arrival Letter.
MoeBlotz| 7.28.11 @ 8:09AM
TAA is one of the programs that should be cut,not expanded to assuage the union hacks. Jobs are created when free trade reigns. The free trade agreements in question should be accompanied by reductions in corporate taxes,the real culprit in job flight off the US shore.
Pecos Pete| 7.28.11 @ 12:14PM
"The free trade agreements in question should be accompanied by reductions in corporate taxes,the real culprit in job flight off the US shore."
EXACTLY!
TrueBlue| 7.29.11 @ 12:27PM
A lot of small business owners file their business income under their personal income at the end of the year. All these fools screaming to raise taxes on the "rich" don't seem to understand this.
A.C. Santore| 7.28.11 @ 9:09AM
No surprise there. Everything Obama does is detrimental to some aspect of American life, and the evil capitalist economy is his enemy #1.
If anyone thinks that this is coincidence, think again.
Read his actions, not his words.
JohnC| 7.28.11 @ 9:20AM
Obama will reach a compromise with the GOP because both Parties are free trader sellouts, and sweetheart free trade deals always wind up benefiting liberal multinational corporations (like GE) and screwing middle class America.
Clinton/Gore’s NAFTA started these suicidal, cheap-labor, free trade agreements that has decimated our manufacturing base and exported good paying American jobs, including many hi-tech and other non-union jobs. Meanwhile, pointy-head economists and Wall Street pundits amazingly can’t figure out why the U. S. economy is tanking and unemployment is so high.
So-called free trade is really international socialism where the U.S. transfers its wealth to Third World and communist countries; it is a race to the bottom. We need to pull out of the anti-American WTO, NAFTA and the rest of the 20,000 page free trade agreements and follow the example of our Founders by enacting heavy tariffs on all imports. Maybe then we will be able to find something made in America when we shop at Wal-Mart.
Michael Tomlinson| 7.28.11 @ 1:34PM
What union are you a member of?
Mark in LA| 7.28.11 @ 4:33PM
Reagan started the free-trade nonsense. He campaigned on it in 1979 and the onoy reason why NAFTA was negotiated under Bush and not Reagan was that Mexico did not go in until one of their many economic crisis hit. Reagan negotiated the Canadian-American Free Trade agreement, NAFTAs forerunner.
However, the rest of what you say is true. Even Paul Craig Roberts a free-trade fool under Reagan now admits it has been a disaster for America. Of course, like most economists he doesn't take any responsibility for pushing policies any 10th grader could see had no merit. He invents terms like "absolute advantage" which is supposedly different from "comparative advantage" without ever acknowledging that the whole theory was just pie-in-the-sky nonsense in the first place. People were always going to game the system and the free-market is always manipulatable. These are things only someone as stupid as an economist cannot see.
Capitalist_pig| 7.30.11 @ 11:06PM
Jobs were going outside the border long before NAFTA. NAFTA did not outsource the U.S.-based manufacturing jobs--executives outsourced them to meet their quarterly numbers for their ill-conceived compensation plans. It's well documented that wrongly incentivized compensation plans induced executives to take far greater risks than they should have, the other side of the coin is the wholesale offshoring of the manufacturing component of our economy. It isn't that U.S. companies can't make a profit from U.S. made goods, it's that it's just easier to slash jobs and offshore the labor to save the money to meet the quarterly reports and also to appease the unrealistic expectations of the Wall Street crowd expecting their shares to double every other quarter. The long term viability of the individual companies and the country as a whole was never on the radar. I feel that the worst thing that has ever happened to our capitalist system is allowing the executive officers to sit on and influence or control the boards of directors that are supposed to be policing these same executives. The inmates are truly running the asylum, and no one really benefits from that type of incestuous realtionship other than the over-compensated executives. No single human being is worth a salary of $25 million. Don't preach to me about the free market deciding the salary levels to get the "top talent" either. I could have run Goldman Sachs into the ground for 1/10 of the salary that they were paying the other guy. There is no competitive market for executive salaries, they all sit on each others' boards giving themselves obscene amounts of cash and perks far outsized compared to the value they add to the company.
Stormzeye| 7.28.11 @ 9:24AM
I love the photo of our Moron in Chief throwing a punch to impress the Koreans. As a lefty leading with his left it's obvious he doesn't know how to fight and is a poseur of the first order. What a surprise.
RCV| 7.28.11 @ 6:01PM
That's surely what we need: a President who knows how to box properly. I bet Jesse Ventura fits that bill.
Stormzeye| 7.28.11 @ 6:22PM
As I said, he's a poseur and yes, even Jesse Ventura would have been a much better Chief Executive.
MoeBlotz| 7.29.11 @ 1:24AM
Jesse Ventura was a wrestler,Harry Reid was a boxer. Would you prefer the latter as president?
John| 7.28.11 @ 9:40AM
Call me naive, but why would the President submit FTAs to Congress knowing that they will be rejected with TAA attached? And why should he submit them as a package when some members support one but not the other?
Aces and Eights| 7.28.11 @ 10:42AM
Propaganda. This is a propaganda fight, a fight for credit or blame. From O'Bozo's position, there is no substance.
Michael Tomlinson| 7.28.11 @ 1:35PM
Obama looks like such a twit in this articles picture. Whose he beating up, his "beard" Michelle?
Michael Tomlinson| 7.28.11 @ 2:43PM
“The U.S. economic picture for the first half of (Obama's) 2011 will not be a pretty one,” Gregory Daco, principal U.S. economist for IHS Global Insight, said in a report. “One will remember the slowdown in the manufacturing sector, a bounce back in the unemployment rate, weak housing, poor confidence, and the debt-ceiling debacle.”
jgo| 7.28.11 @ 6:04PM
The first thing to stop is calling these crooked, imbalanced trade agreements "free trade". Save the term for a genuine treaty that merits the term.
Paul Streitz | 7.29.11 @ 6:14AM
Free Trade?!
This is promoting the policy that lost eight million manufacturing jobs, made China the manufacturer of everything sold in Wal-Mart and put the US in trillions of dollars of debt to the Chinese. At what level of insanity is this.
After losing millions of jobs through this insanity, we are reassured by this article that the workers who lost their jobs will be "retrained." Retrained to do what.
"Free Trade Doesn't Work" is the latest refutation of the free trade ideology. That someone in a conservative newspaper, NH, should write this after losing thousands of manufacturing jobs in his state is outrageous. The ideology of Free Trade, and libertarian thinking, always tops real world results.
Paul Streitz
America First: Why Americans Must End Free Trade, Stop Outsourcing and Close Our Open Borders.
POST American| 7.30.11 @ 1:35AM
-------BTW, speaking of traitor uh, we mean
trade deals, a little declassified '70's Show'
BLAST from the PAST:
DECLASSIFIED State Dept. Memo 200
There's then US Ambassador to RED China
Bush Sr. laying out 'the KEY agenda', the core
'understanding'.
RED China to be massively funded (via the
US taxpayer) to be brought in and brought up
as the world's industrial base, and eventual
top of the NWO pyramid.
The US to be taken down and brought down
to third world status via 'deindustrialization'
and installation of a 'service economy'
(ie franchise slums and pornography).
ALL this contingent on RED China, the world's
undisputed leader in genocide, zealously
embracing aggressive EUGENICS and the
selective extermination of elements of their
own population.
CHECK IT OUT!
AGAIN, term of the times --'Benny violence'.
ISSUE of the age -----TREASON.
The fun NEVER STOPS------!
REALLY
TRULY
UNDENIABLY
johannah| 7.30.11 @ 1:52AM
300,000 plus Americans will be put out of work by these trade agreements. They will be entitled to unemployment benefits. The union is demanding additional displaced worker benefits for them. That is why Obama is holding them up.
I do not like unions. But how are these trade agreements good for America and Americans, when so many will be losing their jobs?
These agreements are neither free nor fair. Fair would be if the agreements contained language demanding workers in these countries must be paid a living wage. That would level the playing field, as American workers cannot compete with people who only make a dollar or 2 a day.
And since they only make a pittance they can't afford to buy products that would be imported from the U S.
So these trade agreements are not free, are not fair and are totally unbalanced in favor of the workers in other countries.
dareisay| 7.30.11 @ 11:51AM
Nothing like the US losing more jobs to foreigners, then taxpayers pay for unemployment and retraining to those employees that lost their job.
Then the job they are newly trained for, is lost to foreigners!
Bush told us our future was high tech jobs, they went to China.
Obama told us our future was "green" jobs, products are made in China and Germany.
Our kids are doomed to work in the service industry, maids, fast food joints, hospitals...but then our elite keep bringing in new Visa workers each year!
I wonder if China will allow us to mfg. those tiny umbrella's that are put into drinks?
I am no fan of FREE trade, as you can tell.....it has not benefitted the whole of our country...it's time to rework this idea!
POST American| 7.30.11 @ 10:15PM
"---We are using MASSIVE third world
immigration to destroy British culture
beyond repair, once and for all ---FOREVER."
-TONY BLAIR
Fmr PM/ Globalist/ Cultural EUGENIST
(Daily Mail interview)
RED China sellout artist and former
Averill Harriman GO-fer, Bush Sr
---Clinton (Rockefeller front)
---Bush Jr ---and our latest Rockefeller front
(Harvard innie, fmr Kissinger aide) ---Bar ---rock O---BAM---uh.
The 'continuity of agenda' is cast iron and worldwide.
------------YOU HAVE BEEN WARNED------------