Aaron Schock

Washington, May 4, 2011 -

Congressman Aaron Schock (R-IL) led the charge with the bipartisan Congressional Colombian Caucus, to introduce a congressional resolution today calling on President Obama to expedite submission of the U.S.-Colombia Free Trade Agreement to Congress that has been stalled since the Colombian government originally negotiated the agreement in October 2007. The resolution offers 101 compelling reasons why President Obama should immediately send the trade deal to Congress for a vote. Schock a member of the Ways and Means committee, and the Trade subcommittee, has been tasked by Chairman Dave Camp (R-MI) to help gather support for the passage of the Colombian agreement. Progress toward final agreement on all three pending trade pacts continues to move forward as the Administration has agreed to begin the technical talks that are necessary before Congress can approve the long awaited trade deals. 

Schock recently returned from a fact-finding trip to Colombia. During the heavily scheduled trip, Schock and the Congressional delegation met with Colombian President Santos, Colombian cabinet level officials, labor leaders, as well as businesses leaders and U.S. officials in Bogota, Colombia. Joining the American delegation were Ways and Means Chairman Dave Camp (R-MI), Ways and Means Trade Subcommittee Chairman Kevin Brady (R-TX), Democratic Whip Steny Hoyer (D-MD), Co-Chair of the Colombia Caucus Gregory Meeks (D-NY) and Ways and Means trade subcommittee member Adrian Smith (R-NE). Schock mentioned that the progress made on the Colombian free trade agreement also meant good news for the other two pending trade agreements with Panama and South Korea. All three, Schock hopes, will be sent to Congress and approved by this summer. 

“The Colombian agreement offers exporters an expanded marketplace and a more level playing field. For farmers and businesses in the United States who are facing an increasingly competitive disadvantage when selling their products inside Colombia, this agreement is good news,” said Schock. “Colombia is one of the closest allies we have in Latin American, so it only makes sense we would expand ways to help our two countries prosper. Now is the time to act.

“In 2010, two-way trade between our two countries was valued at $28 billion, making Colombia the United States’ third-largest market in the Western Hemisphere. However, since Colombia signed the trade agreement in 2006, U.S. products have been charged more than $3.4 billion in needless duties due to the delay in ratification by the United States.”

Colombia has also recently finished negotiations with the European Union on a Free Trade deal and has also concluded deliberations with Canada on a similar agreement expected to go into place on July 1. Both of these agreements will further disadvantage American producers unless the U.S. takes action on a similar agreement.

The congressional resolution offers a convincing case why the agreement should be passed by this summer. Among the many reasons listed include the fact that 41 states exported agriculture products to Colombia, over 80 percent of United States exports of consumer and industrial products to Colombia will become duty-free immediately upon implementation of the Trade agreement, and over the last five year period from 2004-2008, United States agriculture exports to Colombia grew at an average annual rate of 38 percent. More than 99 percent of total Colombia exports to the United States are already duty-free; however, the average tariff paid by U.S. exports to Colombia is 11.2 percent.

In 2007, more than 80 percent of U.S. exporters to Colombia as well as Panama and Korea, were small and medium-sized enterprises. These firms exported some $12 billion to Colombia, Panama and South Korea. Colombia’s GDP of over $430 billion is the 5th largest Latin American economy and the 3rd largest U.S. export market in Latin America behind Mexico and Brazil; making Latin America a very vital economic hub for U.S. trade. The independent U.S. International Trade Commission estimates that implementation of the Colombia agreement would increase exports by $1.1 billion and add $2.5 billion to the U.S. GDP.

Schock notes that the Colombian trade deal would be economic boost to his home state of Illinois and the 18th district as well. He cites as an example, Caterpillar, the Peoria based manufacturing company, exported nearly seven times more products to Colombia than to Korea last year; which is also more than the amount exported to Japan, India or Germany. In 2010, six of CAT’s top ten export markets were in Latin America and they saw a 58 percent increase in sales to Latin American, which is larger than any other market in the world.

Agriculture, the other primary economic driver in Central Illinois, also benefits from the passage of this agreement. Illinois agriculture is a major supplier of grains to Latin America, and Colombia has been one of the top ten export markets for U.S. corn. During 2007-08, the U.S. exported 114 million bushels of corn to Colombia, with an estimated value of almost $500 million. According to the Illinois Farm Bureau, because of the delay in passage of the Colombia FTA, ‘Colombia pursued an agreement with Argentina, Brazil, and other MERCOSUR countries costing us $400 million in lost corn exports (and related jobs) alone in the last three years.’ With a Trade Agreement in place, the American Farm Bureau estimates that the value of American farming exports to Colombia would rise to $700,000,000, more than doubling current U.S. Agriculture exports.

Schock is not alone in his efforts to push for swift passage, he is joined by the original members of the Congressional Colombia Caucus: Reps. Mario Diaz-Balart (R-FL), Henry Cuellar (D-TX), and Gregory Meeks (D-NY)

“The U.S.-Colombia Free Trade Agreement will create American jobs and continue our burgeoning economic growth,” Congressman Cuellar said. “Increasing trade not only provides American families with more affordable goods and services – it will also help services and manufacturing sectors drive job creation, estimated to increase domestic product by $2.5 billion. Exports in the first half of last year alone supported 10 million jobs and brought in $890 billion. Today, we live in a global market that is only growing larger. As Chairman of the Congressional Pro-Trade Caucus, and co-chair of the Colombia Caucus, I will continue to work to bring this agreement to the floor.”

“Illinois’ share of exports to Colombia totaled over $270 million in 2009 and Illinois products sold in Colombia since November 2006 have been penalized upwards of $65 million in import charges that would have been eliminated by the free-trade agreement. This is $65 million that is not being spent on creating new American jobs and 65 million reasons why we need to move immediately to pass this trade agreement,” said Schock.

Supporters of the Colombian FTA and as well as the Korean and the Panama agreements argue that all three should be passed by July 1st.

“The longer we wait the more time we allow our international competitors the chance to enter into agreements with Colombia thus limiting our access and ability to aggressively compete,” said Schock. “Mr. President, now is the time to send us the Colombia agreement, so that we can pass it before July 1. There is no more time for delay; now is the time to vote,” stressed Schock.

POSITIVE IMPACT ON ILLINOIS AND THE 18TH DISTRICT
In 2010, six of Caterpillar’s top ten export markets were in Latin America; last year Caterpillar exported nearly seven times more products to Colombia than Korea. This was more than the exports to Japan, India or Germany. 92 percent of large mining trucks shipped from Decatur, IL are exported; 82 percent of large track type tractors shipped from East Peoria are exported. Caterpillar saw a 58 percent increase in sales to Latin America last year, which is larger than any other market in the world. 15,807 companies exported goods from Illinois in 2007. Of those, 89% are small and medium-sized companies which generate nearly 1/5 of Illinois total merchandise exports. 7.1 percent of total private sector employment in Illinois is linked to export supported manufacturing jobs, and 25 percent of all manufacturing jobs in Illinois depend on exports. Illinois’ share of exports to Colombia totaled over $270 million in 2009. Colombia has traditionally been one of the top ten export markets for U.S. corn, and during 2007-08, the U.S. exported 114 million bushels of corn to Colombia, with an estimated value of almost $500 million.

BACKGROUND
Congressman Schock founded the Colombia Caucus in the House of Representatives last year, which has been actively promoting the U.S. – Colombia Trade Promotion Agreement. Additionally, he first visited Colombia in 2009 and met with Colombian President Alberto Uribe. Schock also recently met with new Colombian Vice President, and former labor leader, Angelino Garzon to discuss passage of the pending trade agreement. Congressman Schock has also hosted numerous events to inform his colleagues in Washington about the positive impact for American businesses of the U.S. – Colombia Trade Promotion Agreement.

Schock has been critical of the Administration’s failure to submit the trade agreement to Congress for approval since 2008 and most recently questioned Trade Ambassador Ron Kirk as to what more needed to be done to make the agreement ready for Congressional approval. Schock also offered an amendment on the Floor in the 111th Congress to study the economic impact of the failure to implement the U.S. – Colombia Trade Promotion Agreement.

An analysis by the U.S. International Trade Commission (ITC) estimates that U.S. exports to Colombia will increase by $1.1 billion. The ITC determined that the Agreement will add $2.5 billion per year to U.S. GDP. Over 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty-free immediately, with remaining tariffs phased out over ten years. The agreement reduces the average tariff faced by U.S. exporters by more than 68 percent, from 11.2 percent to 3.6 percent immediately upon implementation of the agreement. Currently all U.S. agriculture exports to Colombia face tariffs. Upon implementation of the agreement, 77.5 percent of Colombia’s tariff lines will become duty-free for U.S. exports. The American Farm Bureau estimates that the increase in U.S. farm exports to Colombia as a result of the agreement could exceed $690 million per year, more than doubling current U.S. exports.

NOTE: For a copy of the resolution, click here.