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Public Statements

International Trade

Floor Speech

Location: Washington, DC

Mr. UDALL of Colorado. Mr. President, I wish to speak about the recent trade votes that the U.S. Senate had over the last several weeks. I believe that bilateral trade agreements should be based on the premise that by growing economic ties with foreign trading partners our nation levels the playing field on which our companies and workers compete. Trade agreements should also be a means to growing a relationship with established allies that share our commitment to democratic values in an effort to work toward achieving common goals. Over the past several weeks, the U.S. Congress has weighed in on several pieces of legislation that--on balance--keep faith with these goals.

Before I speak to each of the free trade agreements, I would like to reflect on the currency exchange rate oversight reform bill that the U.S. Senate considered just before the pending free trade agreements. It is important to note that playing by the rules is an important element of fair and free trade, and it is a theme I will address several times today in my remarks. The concerns of many Coloradans who both supported and opposed this currency legislation were fundamentally based on fairness. Both sides understand that intentionally undervalued foreign currencies hurt the competitiveness of American exports. I supported currency reform legislation because any country that is intentionally undercutting American companies and workers through the manipulation of its currency, especially if it had agreed to play by specific rules, must be held accountable. That is common sense--and a matter of fairness. This legislation will allow the United States to clearly identify fundamentally misaligned currencies and initiate purposeful efforts to work bilaterally and multilaterally to seek corrective action. We must work in the interest of American manufacturers--and American workers--that rely on a level playing field to succeed, while also engaging our trade partners to work collaboratively to resolve these important concerns. I believe that this currency-related legislation, which passed the U.S. Senate in a bipartisan manner, will send the appropriate signal that we expect our trade partners to live up to our shared commitment to compete fairly in the global marketplace.

More recently, the U.S. Congress considered free trade agreements with Korea, Panama, and Colombia. We enjoy good diplomatic relationships with each of these countries and the United States has a particular interest in maintaining strong diplomatic and economic ties to these countries given our shared values on the international stage. More importantly, the Obama administration, in consultation with Congress, has been able to incorporate pragmatic and responsible ways to address the outstanding concerns raised with each agreement. While these free trade agreements are not perfect, I supported the passage of all three after studying each one carefully, and hearing from a wide range of Coloradans.

Regarding the Korea free trade agreement, the new concessions that protect America's auto industry in addition to reductions in tariffs for U.S. products and strong protections for intellectual property and labor rights solidified my support for the agreement.

Over the last several months the Obama administration worked with the Korean government to gain concessions that will help American manufacturers compete in the Korean market, Asia's fourth largest economy. For example, the Koreans have committed to immediately reduce their eigh percent tariff on U.S.-built passenger cars, including electric vehicles and plug-in hybrids, to four percent and immediately reduce their ten percent tariff on trucks to zero. After 5 years, tariffs on U.S.-made motor vehicles, including electric cars and plug-in hybrids, will be reduced to zero. In addition, we have strengthened safeguards that will prevent any large influx of Korean cars into the U.S. market to protect against unintended effects of the removal of trade barriers. These new concessions won the support of both the U.S. auto industry and the United Auto Workers.

With regard to agricultural products, Colorado producers will benefit from increased market access in Korea through the reduction of existing tariffs on wheat and corn. Existing 40 percent tariffs on certain beef products will be phased out over 15 years and the United States will engage continuously with Korea to plan the removal of other tariff barriers. When I hosted the Korean Ambassador, Han Duk Soo, in Colorado in April of this year, I made it clear that Colorado agricultural producers expect a reasoned approach to removing restrictions and other trade barriers that are in conflict with international sanitary standards and sound science. I am very hopeful that this agreement will help Colorado producers build a relationship of trust with Korean consumers so that they come to understand the high quality of Colorado beef and the well-justified pride that our State feels about its beef.

Autos and agricultural products are just a few areas where American producers will gain better access to the Korean market. Overall, the U.S. International Trade Commission estimated that tariff cuts alone to a variety of U.S. goods could amount to an increase of $10 billion to $11 billion of U.S. goods exports alone. This will help produce a much-needed boost to the U.S. economy. This agreement also includes provisions related to labor and the environment that are the strongest standards to enforce domestic environmental and labor laws included in any trade agreement. It also includes robust protections for intellectual property rights that will set a new benchmark to protect American-made ideas.

In addition to supporting opportunities for American exports, the agreement will enhance America's relationship with a strong partner that is committed to democratic values on the Korean Peninsula. More than 60 years after the Korean war, this trade agreement will serve to further strengthen bilateral ties in a region of growing strategic value to the United States. As a member of the U.S. Senate Armed Services and Intelligence Committees, this was another important factor in my support of the Korea free trade agreement.

Similarly, the Panama free trade agreement, like its Korean counterpart, is aimed to help grow the U.S. economy. In the Panama agreement, we have also included enforceable mechanisms to protect the environment and the rights of Panamanian workers. To address financial and tax concerns and further support labor protections, the United States worked bilaterally with Panama to institute robust legal reforms that protect against the country being used as a tax haven while further enhancing labor protections in Panama. The United States and Panama have worked collaboratively to strengthen tax transparency in support of curbing illicit financial transactions associated with money laundering activities. Notably, due to its positive actions, Panama was removed from the Organization for Economic Co-operation and Development ``Gray List'' of countries that have agreed to, but not yet adopted an international tax transparency standard.

These improvements to the Panama free trade agreement will be incorporated along with reductions in tariff barriers that will improve access to the Panamanian market for U.S. goods and services. Again, this should give a boost to American business at a time when our government should be doing everything it can to help grow our economy.

Currently, U.S. industrial goods face an average tariff of seven percent in Panama and U.S. agricultural goods face an average tariff of 15 percent, while most of Panama's products enter the United States duty-free. After implementation of this agreement, more than 87 percent of U.S. exports of consumer and industrial products to Panama will become duty-free immediately, with remaining tariffs phased out over ten years. Almost half of U.S. agricultural exports will also benefit from immediate duty-free treatment, with most of the remaining tariffs to be eliminated within 15 years. Of particular importance for Colorado is beef, which will see an immediate removal of a 30 percent tariff for prime and choice cut beef, and wheat, which will lock in its already tariff-free treatment.

As Panama embarks on a historic $5 billion infrastructure project to revamp and expand the Panama Canal, American businesses will be better situated to compete for opportunities in the Panamanian market as a result of this free trade agreement. Additionally, this agreement will enhance our strong relationship with Panama, which serves as a major international trade thoroughfare for the United States and the world.

And finally, the Colombia free trade agreement, which was a vote that took even greater deliberation.

Colombia is a strong U.S. ally in Latin America and is a critical regional and global partner. Colombia's market is the third largest for the United States in Latin America and U.S. producers have been losing market share quickly as the Colombians strengthen economic ties with Canada, the European Union and the Mercosur countries of Argentina, Brazil, Paraguay and Uruguay. As other countries facilitate trade with Colombia, American producers have faced continued tariffs on goods exported to Colombia, while Colombian goods face few tariffs into the United States. Currently, the average U.S. tariff on the few Colombian goods subject to a tariff is 3 percent. Colombia's average tariff on U.S. exported goods is 12.5 percent. This agreement will increase market access for U.S. goods and services in Colombia by immediately eliminating duties on 80 percent of U.S. exports to Colombia, with all remaining tariffs eliminated within 10 years.

These numbers show why American businesses have been eager to level the playing field with foreign competitors that have benefited from preferential tariff treatment in Colombia. Still, there have been long-standing concerns with Colombia's history of violence and its human rights record, issues that deeply concern not only me, but many Coloradans. I have looked to Colombia and supporters of this agreement to make the case that adequate progress has been made to determine if the United States should move forward with a trade agreement at this time.

The Colombian and U.S. governments, as well as organizations that have opposed and supported the agreement, acknowledge the problematic record Colombia has had on human rights and labor protections. Most agree that progress has been made, though many disagree to what extent that progress has improved labor conditions and lessened human rights violations. After meeting with groups on both sides of this debate, I concluded that maintaining the status quo was not the best answer. Leaving things as they are now would not create any more incentives for Colombia to maintain or further cultivate its commitment to resolving issues of violence. Nor do I believe that the status quo would strengthen the ties with this key ally in South America. I ultimately believe that the recent labor and legal reforms in Colombia represent concrete steps in the right direction. The commitment of Colombia's political leadership to improving its record is also an indication that Colombia can move beyond its past. The primary objective is for our two countries not only to maintain the shared goal of reducing violence and protecting workers' rights, but also to become stronger economic partners, enabling American business to compete in Colombia's market on a level playing field with our international competitors. Both of these goals help justify moving beyond the status quo.

Let me be clear: we must continue to work collaboratively with the Colombian government to ensure that the appropriate steps are taken toward responsible and meaningful reforms. A meaningful step in this direction is President Obama's commitment to allow the agreement to enter into force only when Colombia has sufficiently met predetermined benchmarks. These benchmarks include efforts to increase protection of labor activists, enforce core labor rights and reduce impunity for perpetrators of violence against union members. Additionally, the underlying agreement includes strong labor provisions that protect the right to organize, the right to bargain collectively, and to provide protections against forced labor, child labor, and employment discrimination.

These changes may not all happen overnight, but we can ensure that what remains to be fixed will be supported by our strengthened economic relationship and the social and economic incentives for Colombia to maintain a positive trajectory in reducing violence. Does the passage of this agreement mean that all of the ills facing Colombia will be cured? I make no such assumption, and I know it will take work and diligent oversight. The burden will be on the Colombian government to follow through on promised reforms and ensure they have the intended effect. It will also be up to this administration to ensure that the benchmarks laid out in its labor action plan are met to the greatest extent possible and that Colombia continues to meet these goals. Finally, it will be up to Congress to provide ongoing oversight to ensure everyone is meeting their responsibilities. I, for one, will be watching.

In addition to these agreements, I note briefly that Congress came together in a bipartisan manner to reauthorize a robust Trade Adjustment Assistance Program that will assist workers, firms and farmers to retrain and retool so they can better compete in the global economy. This was a necessary precursor to my support of these three free trade agreements.

In sum, the free trade agreements with Korea, Panama, and Colombia, while not perfect, present strong opportunities for Colorado and U.S. businesses while also including some of the most robust labor and environmental provisions that we have ever had in a trade agreement with any country. Trade issues are never clear cut, but simply put, trading with our neighbors and partners can help our economy when we set the terms fairly and find balance. By helping to ensure that our trading partners play by fair rules, and by opening foreign markets for U.S. products, the United States is better positioned to win the global economic race.

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