The State of Play on Trade

BusinessWeek ^ | July 17, 2008 | Avi Salzman

[1rudeboy]

Trade deals with Colombia, Korea, and Panama, all rife with political import, are stalled in Congress. In the meantime, some U.S. exports lag

In its Decatur (Ill.) factory, Caterpillar (CAT) assembles a line of the heaviest-duty off-highway trucks, behemoths specialized for use in mining, quarry, and construction operations. One model, the $1.2 million, 163,089-lb. 777F truck, can hit a top speed of 40 mph even while carrying 100 tons of dirt, enough to fill 350 wheelbarrows. Caterpillar has seen a robust market in recent years for these monster trucks, but is worried that companies in other countries will start to eat away at that business. That's because Caterpillar's customers are saddled with an extra cost every time they buy one of the machines. When Caterpillar ships the truck to Colombia, a $180,000 tariff is assessed, even though nearly every product made in Colombia enters the U.S. duty-free.

A trade deal the Bush Administration negotiated with Colombia could change all that, eliminating tariffs on virtually all U.S. products. But the Colombia deal, as well as major agreements with Korea and Panama, has stalled in Congress. These agreements have become a potent issue in the Presidential campaign. Senator John McCain (R-Ariz.) traveled to Colombia two weeks ago and expressed his support for the Colombia deal, while Senator Barack Obama (D-Ill.) has said he wants to reevaluate various trade deals, including the North American Free Trade Agreement, to increase protections for U.S. workers.

Caterpillar lobbyist Bill Lane says delays for deals like the one with Colombia will mean a loss of market share for U.S. companies. "Having a time-out on trade, it means ceding our competitive advantages," Lane says. "We don't want to find ourselves in a situation where Canadian goods get duty-free treatment but ours don't."

[Toddsterpatriot]

A trade deal the Bush Administration negotiated with Colombia could change all that, eliminating tariffs on virtually all U.S. products.

If only we could do this without actually trading with nasty furriners.