By INVESTOR’S BUSINESS DAILY | Posted Wednesday, May 07, 2008 4:20 PM PT
Trade: As the U.S. economic hearth flickers, it makes sense to fan it back with the last hardy embers of growth. One is exports, which burn brightest with free- trade treaties. So why is Congress snuffing them out?
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Last week’s preliminary gross domestic product data for the first quarter showed a pallid 0.6% rise. Housing was a drag, pulling real GDP down 1.2%. Business sales were unimpressive, and consumer spending was weak.
But there was one bright spot: exports, which rose 5.5% according to the Bureau of Economic Analysis, accounting for a third of U.S. economic growth during the quarter.
Maybe that’s why President Bush isn’t letting up on urging Congress to pass three pending free-trade agreements, which will strengthen U.S. exports. It may have hit a wall with House Speaker Nancy Pelosi manipulating House voting rules, but with a potential recession looming, Bush has no choice but to seek it anyway.
“Opening markets is especially important during this time of economic uncertainty,” Bush said Wednesday. “Last year, exports accounted for more than 40% of America’s total economic growth. With our economy slowing . . . we should be doing everything possible to open up new markets for U.S. goods and services.”
Thus far, his plea has fallen on deaf ears in Congress, which has refused to ratify U.S. deals with Colombia, Panama and South Korea. Worse, it has halted any new pacts from being negotiated.
After all, with Pelosi literally changing the House rules for a treaty vote to “anytime I want,” it’s unlikely any nation would negotiate a free-trade deal only to see it become a public bargaining chip for Pelosi’s pork-barrel spending schemes.
Pelosi has allies in Democratic presidential candidates Barack Obama and Hillary Clinton. They have collectively become the Three Stooges of Big Labor, which opposes free trade.
Pelosi insists that she’s putting the American people first. That prompted U.S. Trade Representative Susan Schwab to blast those who “demagogue and prey on anxieties and fear. We do a disservice to the American people by pretending that trade is somehow the culprit of our economic problems and anxieties.” We know whom she meant.
Again, let’s look at what free trade with Colombia would do.
• It slashes tariffs from 32% to zero on 72% of U.S. goods right off the bat. Better still, it levels the playing field for U.S. firms because Colombian goods already enter the U.S. duty-free. In the 17 months that the treaty has awaited passage, U.S. businesses have shelled out $1 billion in tariffs to sell goods in Colombia.
• It provides U.S. investors with legal protections and provides for international arbitration if anything goes wrong.
• It ends child labor and lessens environmental damage, two extras the Democrats requested and got.
Meanwhile, if it’s not passed, the U.S. economy gets . . . nothing.
“Delaying the vote on the Colombia (pact) does not create one American job, it does not put one more dollar in anyone’s pocket, does not save one life, does not help one union to organize, or protect one endangered species,” Schwab said.
It just goes to show that doing nothing on free trade isn’t an accomplishment. In fact, it’s a wet rag on the U.S. economy that will eventually draw angry retribution from U.S. voters.
Bush knows this. Too bad Pelosi doesn’t.