Trade notes

I attended this policy forum on the U.S. trade agenda yesterday at the Heritage Foundation. The event focused on bilateral trade agreements with South Korea, Panama and Colombia which have been concluded but not yet ratified by Congress. Some notes:

• The bilateral deal with South Korea would eliminate South Korean tariffs on U.S. auto imports from their current 8 percent, while the U.S. would end its tariffs on South Korean auto imports from their current 2.5 percent level.

• South Korea is attempting to become the "free trade hub" of Asia. This is further evidenced by its conclusion of a free trade agreement with the European Union this week.

• Panama already enjoys many of the benefits under the bilateral deal with the U.S. through its participation in the Caribbean Basin Initiative. The agreement with the U.S. would simply make its current benefits permanent.

• Panama concluded a free trade deal this year with Canada and has entered into negotiations with a number of Caribbean countries as well as participants in the European Free Trade Association.

• Colombia's legislature approved the bilateral deal with the U.S. -- reached in 2006 -- twice during 2008. (not sure why it needed to go through twice, but nonetheless impressive)

• Colombia has engaged in an active effort to integrate itself more in the global economy since 2002, concluding agreements not only with the U.S. but Canada and EFTA among others as well. Foreign direct investment in the country has increased from around $2 billion in 2004 to $11 billion today.

• Colombia has not experienced negative GDP growth since 1999 (indeed, the strength of its economy is profiled in this week's edition of The Economist).

• In August the U.S. and Colombia reached a defense cooperation agreement which prompted quick threats of economic retaliation from Venezuela and Ecuador. Venezuela, Colombia's second largest trading partner, vowed to cut off trade entirely. Since then trade with Venezuela has declined by 52 percent and trade with Ecuador 20 percent. Colombia has paid a substantial price for being an ally of the U.S.

• One speaker quoted Rep. Charles Rangel regarding the three trade deals: "It's not the facts on the ground, it's the politics in the air."