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Feds Defend Trade Pacts

New York Times

24 April 2008

Feds Defend Trade Pacts

By Angus Loten,

WASHINGTON — Federal officials and business leaders this week dismissed calls by the Democratic presidential candidates to renegotiate NAFTA, saying free trade deals help American small businesses and the U.S. economy grow.

"All the trend lines before and after NAFTA are positive," U.S. Trade Representative Susan Schwab told small-business owners gathered in Washington for Small Business Week, an annual series of workshops and award ceremonies hosted by the Small Business Administration. "If you have aspirations to grow, there are a lot of opportunities out there," she said, calling U.S. economic isolationism a threat to economic growth.

Schwab urged Congress to leave NAFTA intact, while acting on other recently negotiated trade pacts, including pending agreements with Colombia, Panama and South Korea. House Speaker Nancy Pelosi (D-Calif.) has delayed a vote on a free trade deal with Colombia that eliminates tariffs on U.S. exports. Goods from Colombia currently enter the U.S. market duty free under a long-standing agreement that federal lawmakers extended last year.

More than 80 percent of about 9,000 U.S. companies that exported goods to Colombia last year were small and midsize businesses, accounting for more than $1.7 billion in trade, according to the Commerce Department.

"If this agreement doesn’t come up for a vote, we’ll have lost a major opportunity for small and midsize companies," Schwab said.

Both Hillary Clinton and Barack Obama have attacked NAFTA in their bids for the Democratic presidential nomination, blaming the 14-year-old North American free trade deal for widespread job cuts in the U.S. manufacturing sector.

Schwab said job loses in manufacturing are the result of boosted productivity, not foreign trade.

James Morrison, the president of the Small Business Exporters Association, said a surge in U.S. exports kept the economy from falling into recession after last year’s housing market collapse. He said small businesses that participate in international trade tend to grow faster and outperform others.

"It’s getting cheaper every year to play this game," Morrison said, citing the lower U.S. dollar. He said government negotiated trade deals have helped bring down transaction costs for smaller businesses in the global market.

Oscar Neal Asbury, whose Weston, Fla.-based restaurant equipment export company launched China’s second McDonald’s franchise, called NAFTA the "most important piece of trade legislation in the history of the United States."

Asbury said it was disheartening to see the agreement being attacked in the Democratic primaries. "We have nothing to fear as American exporters," he said.

At a trade summit in New Orleans on Tuesday, President Bush joined the leaders of Canada and Mexico in defending NAFTA, which they say has created new jobs and cheaper consumer prices.