Congress urged to boost economy via trade pacts

WASHINGTON—Several of the nation's largest companies said Wednesday that Congress could help revive the ailing U.S. economy by approving three pending free trade agreements this year.

Exports have been a rare bright spot for the economy, which is struggling with the housing slump and financial crisis. Supporters of trade agreements with Colombia, Panama and South Korea argue that approval of the accords would lead to more exports and jobs.

"This is a time to continue to push exports to be able to create jobs and to keep our economy moving forward," Commerce Secretary Carlos Gutierrez said during an outdoor rally with several business groups on Capitol Hill. "We should be approaching these trade agreements with the same sense of urgency as the stimulus package."

Congress quickly passed an economic stimulus bill, which included tax rebates, in February.

Exports have contributed up to four-fifths of U.S. economic growth in the past year. Many economists believe the United States would have slipped into recession without export growth.

But the trade agreements, which were signed in 2006 and 2007, have stalled in Congress. House and Senate Democrats particularly oppose the pact with Colombia because of ongoing violence against union organizers. They also want to see a program intended to help U.S. workers displaced by foreign competition extended before taking up the trade accords.

House Speaker Nancy Pelosi, D-Calif., and Democratic presidential candidate Barack Obama also support passing a second stimulus package this month, before Congress adjourns for the elections.

The economy contracted late last year and grew slightly earlier this year before picking up in the spring, in part due to the stimulus package. But that rebound isn't expected to last. The Labor Department said last week that the unemployment rate reached 6.1 percent in July, a five-year high.

Business groups such as the U.S. Chamber of Commerce visited congressional offices Wednesday and have blanketed Capitol Hill with letters in support of the trade agreements.

Sarah Thorn, a lobbyist for Wal-Mart Inc., which is spearheading a coalition in favor of the Colombia pact, said the company imports almost 70 percent of the cut flowers it sells from Colombia.

While most enter the United States duty-free under a temporary trade preference program, the free trade agreement would make their duty-free status permanent, she said.

Selina Jackson, a lobbyist for United Parcel Service Inc., said the company adds a new U.S. job for every 40 international packages it ships.

Other companies supporting the agreements include Chevron Corp., Citigroup, Boeing Co. and Caterpillar Inc.

They face determined opposition from organized labor, particularly on the agreement with Colombia. Thea Lee, policy director for the AFL-CIO, said that more union organizers have been murdered in Colombia this year than in all of 2007.

"To the extent conditions on the ground have changed, they've gotten worse," she said.

Exports have increased largely due to the recent decline in the dollar, Lee said, which has made U.S. exports cheaper overseas. Trade agreements with smaller countries such as Colombia are "essentially irrelevant to net exports" and the broader economy, she said.

The nonpartisan U.S. International Trade Commission estimates that the agreement with Colombia, if approved, could boost U.S. exports by about $1.1 billion, while the Korea pact could lead to a $10 billion increase. The agency didn't provide a specific estimate for Panama, but said the impact would likely be small given its size.

By comparison, the United States exported $164.4 billion of goods and services in June, according to the Commerce Department, and over $1.6 trillion in all of 2007.

Even some congressional supporters of the agreements acknowledged Wednesday they are unlikely to be approved this month. They could end up as another item on the plate of the next president.