Congress is set to vote this week on three pending free trade agreements (FTAs) with Korea, Colombia, and Panama. NFU has long opposed each of these agreements because they are very similar to North American Free Trade Agreement (NAFTA) and Central American Free Trade Agreement (CAFTA), both of which have cost American jobs and worsened the U.S. trade deficit.
Free trade agreements must have labor and environmental standards, currency manipulation and food security protections so that each nation can compete on a level playing field. Advocates for the agreements argue that the U.S. will increase exports and create jobs, but we have seen this movie before.
Mexico devalued the peso shortly after the signing of NAFTA, wiping out all trade gains that the U.S. would have gotten otherwise. History is very likely to repeat itself without currency manipulation protections. South Korea has previously manipulated its currency twice, in 1989 and 1998. Without any prohibitions in the trade agreement against manipulating currency, there is a very real possibility that it will happen again, eliminating out any of the promised gains that the U.S. would have gotten from this agreement.
The Colombia agreement is also concerning. In 2010, 51 trade union members were killed in Colombia, giving it one of the worst labor records in the world. Panama, meanwhile, has cleared more than 2 million acres of forest in the last 40 years, more than 10 percent of the country’s total land area. According to the Inter-American Commission on Human Rights, Panama lacks adequate environmental quality standards to ensure the health and quality of life of its citizens and the preservation of natural resources. Environmental and labor standards must at least meet those of the United States in any fair agreement.
Since 1990, agriculture has been one of the few sectors of the U.S. trade economy that consistently has a trade surplus. However, with countries that the U.S. has a trade agreement with, U.S. agriculture has a net trade deficit in seven of the past eight years.
History has shown time and again that FTAs in the mold of NAFTA and CAFTA simply do not benefit producer in the United States. We strongly urge Congress to consider these facts and reject the three pending FTAs.