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John Block Reports from Washington

RSS By: John Block, AgWeb.com

John Block has dedicated his professional career to the fields of agriculture, food and health.

Free Trade

Jul 31, 2008

Free trade agreements have become a hard sell in recent years. We have three right now that have been negotiated and are ready to be voted on by the Congress – Colombia, South Korea, and Panama. President Bush wants them passed, but Speaker Nancy Pelosi and the Democratic Congress are not going to let it happen.

Although not perfect, over all, our trade agreements have been a big net plus. Look at the USA as an example. USA is a huge free trade zone – free trade between all 50 states guaranteed in our Constitution. It has worked providing all kinds of benefits. Pineapple from Hawaii; oranges form Florida – duty free. We can’t grow those fruits in Illinois. The Midwest is shipping corn and wheat to states that aren’t very good at growing those crops. Every region is allowed to do what it does best. That is comparative advantage.

Europe used to have duties and trade restrictions between their countries. Not anymore. The huge advantage of free and unrestricted trade was clear. And today, the European Union is a huge free trade zone.

In 1994, President Clinton and the Congress created the North American Free Trade Zone. Millions of new jobs have been created by allowing U.S., Canada, and Mexico to trade freely based on comparative advantage.

Countries all over the world are writing bilateral free trade agreements with each other.

All the while, we are sitting on our hands doing nothing.

In addition to providing economic value to the citizens from countries that are trading freely, trade strengthens security. Countries usually find a way to solve their differences peacefully if they are important trading partners.

It is time the trade critics in Congress quit playing politics and cozying up to the labor unions and passed the trade agreements that have been negotiated.

The Colombian agreement should be first on the list. 90% of Colombian products already enter the U.S. duty-free. Our products going into Colombia are subject to a 35% tariff. You don’t have to be a math major to see that a trade agreement would be in our favor. In addition, Colombia is a good friend of the U.S. and we need to build on that relationship.

Until next week, I am John Block from Washington.

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