We need to send more grain to Columbia, earth movers to Panama and technology to South Korea.
Increased trade with those three countries could boost employment in Illinois for years to come, thanks to free trade agreements now being considered by Congress. Pressure from labor unions, however, has scared some lawmakers and put these agreements in limbo. We need to encourage our members of Congress to take the lead and push them across the finish line.
You can help. Let your congressperson and senators know that increased trade with South Korea, Columbia and Panama will level the playing field for Illinois businesses. The free trade agreements will eliminate or cut tariffs on many goods and products made in this state. Once businesses can export more, they add jobs and build the economy.
Call them. Write to them—through the mail, email or fax. Let them know your story, and why increased international trade is important to you.
Illinois is already the sixth-largest exporting state, and more than a half-million Illinois jobs depend on international trade. In 2008, Illinois exported nearly $54 billion worth of manufactured goods and $7.5 billion in agricultural products. We can’t let critics thwart a great opportunity for U.S business to improve the balance of trade.
The agreements with each country were negotiated about five years ago and have languished since. The Obama Administration, to its credit, has made it a priority to get all three passed this year. These trade agreements could be an important spark for businesses to create more jobs across the country.
It’s widely known that major Illinois-based corporations such as Caterpillar, Motorola, ADM and Abbott increasingly rely on international trade. As Caterpillar CEO Doug Oberhelman has said, the U.S. has five percent of the world’s population, so the company needs to sell its products to the other 95 percent.
Our federal leaders also need to know how important global trade is for small- to mid-sized companies. One major international order could add dozens of jobs. In fact, 89 percent of the 15,607 Illinois companies that exported goods in 2007 had fewer than 500 employees.
If the U.S. does not pass these agreements, it only makes it easier for businesses from other countries to expand their trade opportunities. For example, the U.S. Chamber estimates that 380,000 jobs and $40 billion in export sales could be lost across the country if the U.S. failed to implement the Colombia and South Korea agreements and the European Union and Canada went ahead with theirs.
I’d like to give you a brief synopsis of the agreements and what they mean to Illinois businesses.
South Korea
South Korea is the fifth-largest U.S. market for agricultural goods, which makes the U.S.-Korea Free Trade Agreement especially important to Illinois. The original agreement was signed in 2007, but a new one was finalized in February 2011 after extensive negotiations. It will be submitted to Congress soon and could add billions of dollars in increased U.S. exports.
Korea is an important market for many U.S. business sectors. For example, more than 80 percent of exports from the U.S. to Korea are manufactured goods. Korea is also an important market for information and communications technology companies because many of its homes and businesses are equipped with broadband internet access.
Illinois companies exported about $750 million in goods to South Korea in 2008. Under this agreement, many manufactured goods produced in Illinois would enter Korea duty-free immediately. Other tariffs would be eliminated in the next few years. In addition, Korean duties on Illinois-produced agricultural products such as soybeans and feed corn would be eliminated immediately. In 2014, pork products would become duty-free.
Colombia
The Colombia Trade Promotion Agreement (CTPA) would expand trade between the two countries and eliminate tariffs and other barriers to goods and services. For example, 80 percent of U.S. products would be duty-free, as would two-thirds of farm products, which is of particular interest to Illinois.
Meanwhile, other countries are exploiting their own trade agreements to muscle U.S. companies and farmers out of the Columbian market. For example, our corn exports to Columbia have plummeted in recent years, which hurts the Illinois economy. The CTPA was signed about five years ago but has been stopped because of Congressional opposition. Unions have said publicly that they’ll continue to fight it.
Panama
The trade agreement between the U.S. and Panama, also signed about five years ago, would allow 88 percent of U.S. products and half of farm exports to enter duty-free. Currently, U.S. products face tariffs while the U.S. does not charge duties on Panamanian goods, thanks to an agreement reached in 1984.
Panama is another important agricultural market for the U.S., especially for corn, soybeans and pork. It’s also a valuable market for small businesses—83 percent of the 7,500 companies that export to Panama are small- or medium-sized operations.
How to Get Involved
You can let your U.S. representative and U.S. Senators Durbin and Kirk know about your support for these treaties by contacting them directly. You can also work through the U.S. Chamber of Commerce’s pro-trade website, traderoots.org, where you can sign a petition and learn about other ways to get involved. Let the Illinois Chamber know when you reach out because we want to get a better picture of how important international trade is to Illinois employers.
President Obama’s stated goal is to double U.S. exports in the next five years—an increase that would support two million additional jobs. Let’s do all we can to make sure these free trade agreements pass so that Illinois—with its great history of manufacturing and agriculture production—reaps the benefits, in jobs and revenue. iBi
