The recently named keynote speaker FCIB’s International Credit and Risk Management Summit , to be held May 12-14 in Prague, intimates in a late January interview with NACM that it is unfair and/or misleading to continue looking at member of the BRICs nations (Brazil, Russia, India, China) as a group, since the nations demonstrate more and more how little they have in common.

“You cannot talk about emerging countries, like the BRICs, as a group—It doesn’t work this way anymore,” said Ludovic Subran, chief economist at Euler Hermes. “You’d never talk about the U.S. in a regional context with Canada.”

In addition, the nations also are in a pattern where they are struggling, and failing, to maintain its white hot growth rates of the past few years. At this point, the individual nations that comprise the BRICs may have to reinvent themselves somewhat, as notable by India’ s move to diversify the economy and finish of free trade agreements to bolster opportunity.

“The BRICs are so 2005…They’ve reached their limits in growth rates,” he said of over-emphasis on BRICs members by the international business community. “Now the question is how they are each going to handle it. What’s next?”

-Brian Shappell, CBA, NACM staff writer

(Note: Look for the extended version of this story in the new edition of NACM eNews, available via email and the NACM website late Thursday afternoon. For more information on FCIB’s conference, visit http://www.fcibglobal.com/icrms-2013).

 

Though previous attempts had stalled and even with the European Union’s economic fall from grace that looks unlikely to reverse itself anytime in the near term, Brazil looks to be spearheading effort to bolster trade opportunity.

Brazilian and EU officials met this week and announced an agreement to reboot free trade agreement (FTA) talks between the European bloc and the Mercosur group, which Brazil is a key part of. Mercosur also includes Venezuela, Argentina, Paraguay and recent gainer Uruguay. There are also the possibility that Brazil could negotiate a bilateral deal involving it and the EU, pending on how eventual talks go.

The first of the attempts to establish a Mercosur-EU FTA fell apart just short of a decade ago after five years of talks. Several nations in South America have been criticized for deeply protectionist behavior during various points in recent years. This is especially the case with Argentina and, to a lesser extent, Brazil. The latter, considered the pearl of the South/Latin American economies along with an emerging Mexico, rocked some proverbial trade boats as a slowdown in growth led its officials to place restrictions and/or tariffs on several types of imported products, such as from the U.S. automotive industry.

-Brian Shappell, CBA, NACM staff writer
 

• The U.S. Senate and House finally voted in favor of provisions to avert the long-discussed fiscal cliff that pitted Democrats/the Obama Administration and Republicans against each other on issues including taxes, budget spending and debt.
• The last Credit Mangers’ Index (CMI) of 2012 showed a small decline on a drop-off of sales levels. Fiscal cliff uncertainty throughout last month of the year was seen as a significant driver of problems.
• Proponents of Chapter 9 (municipal bankruptcy) got a boost in the form of a court decision against a pension group in California and a new law in Michigan easing filing requirementes somewhat.
• A deal was struck to push back contract talks for 30 days to avert a late-December port strike that would have affected more than a dozen of the largest East Coast ports at a time when retail could ill afford delays.
• India inked a Free Trade Agreement with its fourth largest trading partner, ASEAN (a block of Southeast Asian nations) and remains at work on several bilateral deals.
• Exporting levels in Asia improved slightly though the steep decline in the European Union amid the debt crisis looms as a massive concern for exporting nations and businesses there and virtually worldwide.
• Tribune Company finally exited bankruptcy.
• European Union manufacturing levels declined by levels greater than expected.
• Retail bankruptcies among British companies continued to rise for the calendar year 2012.
• Russia launched a registry of companies that declare bankruptcy.
• U.S. consumer and business confidence continued to slump at year's end.

(Note: For more on several of these stories, check out Thursday’s edition of NACM eNews, available late Thursday afternoon).

-Brian Shappell, CBA, NACM staff writer

Carlos Montoulieu, of the U.S. Department of Commerce, confirmed in an interview with NACM that the Trans-Pacific Partnership (TPP) was the overwhelming priority for U.S. officials regarding trade and that there’s “quite a bit of momentum” therein. That also means potential for new, bilateral Free Trade Agreements (FTAs) is scant.

Montoulieu also confirmed that a rumored Trans-Atlantic Agreement between the United States and the European Union would likely get a boost after recommendations—expected before year’s end—are officially released by the High Level Working Group reporting to President Barack Obama. It’s all part of the administration’s continued goal of doubling exports by the end of a five-year period that ends in December 2014, one that was on track after two years but suffered setbacks during a highly partisan election year in 2012.

The purpose of the TPP is to break down trade barriers, especially in the eastern portion of the Asia-Pacific region, where manufacturing prowess and raw materials holdings are becoming more evident. It was estimated at FCIB's Global Conference this week in Philadelphia that nearly half of the $22 trillion in global economic growth between now and 2020 will be in the Asia-Pac region.

With the focus square on multi-lateral deals, the prospects for new, bilateral deals continue to fade. In fact, acting deputy assistant secretary for services industries for Commerce’s International Trade Administration said he was “not aware of any that are high on the list of priorities.”

“Our focus is on the TPP—there has been a lot of momentum there,” Montoulieu told NACM. “It’s actually sometimes easier to do a multi-lateral deal because of the mass behind it. Two nations have to be very dedicated.”

Montoulieu sidestepped questions as to whether bilateral FTA’s were essentially taken off the board because of the difficult and lengthy battle to get the last three—Colombia, Panama and South Korea—through to enactment, as has been widely rumored. The assertion is that a hangover effect is in play.

- Brian Shappell, CBA, NACM staff writer

FCIB's 23rd Annual Global Conference has kicked off in Philadelphia with the topic of U.S.-based trade high on the list of priority topics. To wit, U.S. Chamber of Commerce Vice President John Murphy discussed recent trade-related victories emanating from the U.S. federal government and what needs to be at the top of the agenda going forward.

Of its big three concerns for 2011 and 2012, two have been accomplished: Congress approved the three Free Trade Agreements and, despite some argument involving the role of and/or "size of government" objections, the charter of the Export-Import Bank of the United States was reauthorized. Murphy noted both were of massive importance, as is a yet-to-be worked out legislative agreement in the U.S. Congress involving restrictions on the books regarding Russia. Russia continues to become a more open economy with its newfound accession into the World Trade Organization; however, long-standing laws on the books technically would allow Russia to discriminate against U.S. businesses until they are removed.

"The U.S. has to pass legislation so American companies can get those benefits; other nations are already benefiting from Russian's ascension," Murphy said. He added that Congress could begin tackling this issue as early as Friday, during the lame-duck session. Murphy also laid out a five-point agenda of what the Obama Administration should, in the eyes of the chamber, focus on in 2013 and beyond to continue helping U.S. businesses take advantage of growth opportunities through exporting:

1. Trade Promotion Authority – President Barack Obama needs to request this power, which includes the ability to negotiate Free Trade Agreements (FTAs), which every president since Franklin Roosevelt has had. The Chamber expects the president will ask for it in the second term.
2. Trans-Pacific Partnership – There needs to be more interest in the “Pivot to Asia” area. Nearly half of the $22 trillion in global economic growth between now and 2020 will be in the Asia-Pac region. Of late, the U.S. share of Asian imports actually fell 43% in the last decade. Lack of FTAs are part of the problem, especially in East Asia.
3. Trans-Atlantic Trade and Investment Pact possibility – U.S-EU commerce leads the world with $1.5 trillion in goods, services and income receipts. The High-Level Working Group sees a potential agreement, reportedly, and could recommend it in a report expected to be out before year's end. Murphy noted the barriers are low already "but volume is so large that even removing low barriers would lead to a economic impact that would be significant.”
4. New FTAs – Brazil, Egypt, India and Indonesia all represent places of growing opportunity and are places the U.S. should target. There are significant barriers in all of these, however, which doesn't even touch on the point that getting the last three FTAs through (South Korea, Panama, Colombia) and into enactment were near-decade-long tasks.
5. Multilateral Trade Deals – There's new hope an International Services Agreement could be negotiated. The prospects are actually excellent that negotiations will start next year. In addition, a Trade Facilitation Agreement would speak to reforming international customers' procedures. "Time is money. Where clearance can take days, that imposes a real cost that is often higher than the actual tariffs," said Murphy. A third piece would be to expand product coverage of the Informational Technology Agreement; when the info tech agreement was last negotiated, smartphones/tablets weren't in existence. An update therein is badly needed.

-Brian Shappell, CBA, NACM staff writer.

Panama’s rise in prominence continues to catch the eyes of the business and investment worlds. The latest to take note, and take action, was Moody’s Investment Services.

NACM has noted previously Panama’s commitment to massively expanding its well-known and oft-used canal as well as its continued work to break down inter-governmental trade barriers has helped in positioning the small Latin American nation as increasingly prominent. Moody’s Investment Services listed the same among many reasons it raised the government’s credit rating Monday.

“Panama's economy has grown at an average rate of 7.3% during the past 10 years, the highest rate of growth in Latin America and among the highest in the world. Despite weakening external conditions, Panama continued to show remarkable economic dynamism in the first half of 2012,” Moody’s said. “Though recent growth rates are not sustainable, medium-term growth prospects remain strong thanks to the expansion of the Panama Canal, the Martinelli administration's ambitious infrastructure investment plans and the recent ratification of the free trade agreement by the U.S. Congress.”  Moody’s added that newfound commitment by Panamanian officials toward gold and copper mining also make the nation attractive from a credit and investment point of view.

This comes less than two months on the heels of the Commerce Department noting that, among major export markets, no nation has seen a larger rise in the purchase of U.S. goods in recent years. To wit, the 36.3% increase since 2009 (through September) bested the second faster riser (Turkey) by nearly 8 percentage points.  

Key to watch in the coming months and years will be something else that has been already been on expert market-watchers’ radar: whether the government there can manage growth responsibly and avoid creating troubling fiscal imbalances for the medium- and long-term. It’s something that not-too-distant neighbor Brazil, despite its hot status of recent years, has once again seemed to fail in mastering.

-Brian Shappell, CBA, NACM staff writer
 

The free trade agreement (FTA) pending between the United States and Panama will enter into force on October 31.

Letters exchanged this week between U.S. Trade Representative Ron Kirk and Panamanian Minister of Commerce and Industry Ricardo Quijano established the date on which the FTA would go into effect, after officials in each country completed a review of laws and regulations related to the agreement's implementation.

When the FTA enters into force next week, Panama will immediately reduce or eliminate tariffs on U.S. industrial goods, which currently average 7% but can stretch as high as 81%. Furthermore, over 86% of U.S. exports of consumer and industrial products to Panama will become duty-free immediately, including information technology equipment, construction equipment, aircraft and parts, medical and scientific equipment, environmental products, pharmaceuticals and fertilizers.

"This agreement also provides U.S. firms and workers improved access to customers in Panama’s $22 billion services market, including in areas such as financial, telecommunications, computer, express delivery, energy, environmental and professional services," said Kirk. "Panama is one of the fastest growing economies in Latin America, expanding 10.6% in 2011, with forecasts of between 5-8% annual growth through 2017. That adds up to support for more well-paying jobs across the United States."

The FTA is also expected to benefit the U.S. agricultural industry, as U.S. agricultural exports to Panama currently face an average tariff of 15%, with some reaching as high as 260%. Upon entrance into force, the agreement will immediately make nearly half of U.S. exports of agricultural commodities to Panama duty-free, with most remaining tariffs being eliminated over the next 15 years.

- Jacob Barron, CICP, NACM staff writer

A U.S. Chamber of Commerce official just announced as a headliner of FCIB’s 23 Annual Global Conference in November, has not been shy in urging the federal government to widen its approach to expanding its exporting activity as the best, perhaps, only hope of growing jobs significantly in the short- or medium-term.

Myron Brilliant, senior vice president of international affairs with the Chamber of Commerce, has noted through appearances, like one earlier this year on CNBC, the importance of continuing to pursue new free trade agreements (FTA’S) like the trio that were passed in the last year (Panama, South Korea, Columbia). Brilliant, who will keynote FCIB’s conference in Philadelphia (Nov. 11-13), argues that, basically: FTA’s increase exporting activity and, in turn, exports create jobs. Brilliant also advocates for pursing additional means to expand market access for U.S. businesses in growing economies like Vietnam and Malaysia, where access is considered far from open. Moreover, working out such deals could help the U.S. set terms on issues such as dealings with state-owned businesses and intellectual property rights.

Brilliant almost certainly will hit on those topics during his trade-and-investment-themed address in Philadelphia as well as offer insight into future opportunities, risks and barriers facing the major trading nations.

-Brian Shappell, CBA, NACM staff writer

(Note: For more information on FCIB’s Annual Global Conference, visit www.fcibglobal.com).
 

Congress adjourned for its annual August recess last Friday without passing a bill to approve permanent normal trade relations (PNTR) with Russia.

This means that Russia will officially join the World Trade Organization (WTO) on August 22, and be well within its rights to increase tariffs on U.S. goods entering the country. Since Congress won't return to work until September 10, the failure to pass a bill before leaving Capitol Hill puts U.S. exporters at a competitive disadvantage in Russia, the world's ninth largest economy, at least until PNTR can be approved.

Immediate passage after the conclusion of the August recess isn't exactly a guarantee either, as Congress is expected to be preoccupied with looming defense cuts and the sequestration details of last year's debt ceiling agreement.

In the final week before the recess, neither chamber of Congress even tried to schedule a vote on two bills that would've approved PNTR with Russia by repealing the Jackson-Vanik amendment, a Cold War regulation that made U.S. preferential tariff rates for Russia products conditional on the country allowing Jews and other minorities to emigrate freely. The amendment is regularly suspended with little fanfare, but its presence on U.S. books allows Russia, under WTO rules, to discriminate against U.S. products until the regulation is eliminated.

Each version of the PNTR bill has been coupled with a version of the Magnitsky Act, named for anti-corruption lawyer Sergei Magnitsky who died in 2009 under mysterious circumstances after serving a year in Russian prison. The House's version would deny visas and freeze the assets suspected of involvement in Magnitsky's death, while the Senate's version would take a much broader approach, allowing the law to be applied to human rights violators outside of Russia and beyond the scope of the Magnitsky case.

Some iteration of the Magnitsky legislation was considered a prerequisite for any bill approving PNTR, as lawmakers were wary of being perceived as having given Russia a free pass on trade without any penalties related to the country's human rights record, especially in an election year. Analysts have noted, however, that PNTR has a time limit, while either version of the Magnitsky Act does not. Congress could easily have approved PNTR ahead of Russia's accession to the WTO and addressed the Magnitsky legislation at a later date.

- Jacob Barron, CICP, NACM staff writer
 

A high tide doesn’t necessarily raise all ships. Perhaps the most drastic sovereign business example of this is South America.

Though Brazil has been one of the drivers of the world economy for a few years, Colombia is enjoying a resurgence and the benefits of a new free trade agreement with the United States, and countries like Chile are feeling a boost from strength in industries ranging from raw materials to wine production, while Argentina has become a proverbial whipping post.  All was fully on display at the G20 Summit in Mexico.

Argentina took several shots this week, not the least of concern was over the Falkland Islands row with the UK. A number of nations including Spain, Germany and the UK have called for sanctions against Argentina for its perceived lack of adherence to economic and legal commitments. The U.S. Congress even drafted a Congressional Resolution asking for the nation’s removal from the G20 unless it starts meeting demands.

Meanwhile, in a move also pointed at Argentina, along with South Africa and Brazil, a majority of the G20 voted to extend a pact barring the establishment of new trade barriers through 2014. Argentina has been seen as one of the nations most prone to protectionist policies that, in theory, members of the G20 have vowed to avoid.

At the 2012 Credit Congress in Texas, NACM Economists Chris Kuehl, PhD noted that Argentina has fallen so far it’s now considered in similar low ilk comparable to nations like Venezuela and Ecuador.

- Brian Shappell, CBA, NACM staff writer

The U.S.-Colombia Free Trade Agreement (FTA) officially entered into force yesterday.

The agreement is expected to increase U.S. exports to Colombia by more than $1 billion annually, while increasing U.S. gross domestic product by $2.5 billion and supporting thousands of new jobs. More than 80% of U.S. exports are now immediately granted duty-free access according to the terms of the FTA, while remaining tariffs will be phased out over the course of the next decade.

"Colombia is dropping tariffs on our manufactured and agricultural goods and that means the door is opening for American workers and businesses to grow," said Senate Finance Committee Chairman Max Baucus (D-MT). "This is a major economic win that levels the playing field for American workers and businesses."

Baucus noted that U.S. companies have lost Colombian market share recently since, in the years between the U.S. FTA's creation and its approval, Brazil, Argentina and Canada have all signed their own FTAs with Colombia. "Colombia's economy is growing quickly and it's a lucrative market for the world-class products made here in the U.S.," he added. "This trade deal is worth a billion dollars in new U.S. exports and thousands of new jobs at home, and that's just the kind of boost our economy needs."

Business groups also lauded the FTA's entrance into force. "Colombia has been the world's greatest turnaround story of the past decade," said Thomas Donohue, president and CEO of the U.S. Chamber of Commerce. "Given the Colombian economy's rapid growth, this landmark agreement will open the door to exciting new business opportunities and job creation in the U.S. and Colombia."

U.S. exports to Colombia have already risen four-fold over the past decade, topping $14 billion last year, according to the Chamber.

Jacob Barron, CICP, NACM staff writer
 

The U.S.-Colombia free trade agreement (FTA) will enter into force next month, far sooner than many initially expected.

During the Summit of the Americas in Colombia this past weekend, President Barack Obama announced that the FTA will take effect on May 15, allowing over 80% of U.S. exports of consumer and industrial products to enter Colombia duty free. These include agricultural and construction equipment, building products, aircraft and parts, fertilizers, information technology equipment, medical scientific equipment and wood. Additionally, more than half of U.S. exports of agricultural commodities to Colombia will become duty-free, including wheat, barley, soybeans, high-quality beef, bacon and almost all fruit and vegetable products.

The ahead-of-schedule effective date comes as a result of quick work on the part of both nations to review each other’s laws and regulations related to the agreement’s implementation.

“This agreement will provide American businesses, farmers and ranchers with significantly improved access to the third largest economy in South America,” said U.S. Trade Ambassador Ron Kirk. “That means support for well-paying jobs at home.”

The agreement will also provide significant new access to Colombia’s $180 billion services market, supporting increased opportunities for U.S. service providers.

“This landmark agreement opens the door to new business opportunities, economic growth and job creation in the U.S. and Colombia,” said Thomas Donohue, president and CEO of the U.S. Chamber of Commerce. According to the Chamber, U.S. exports to Colombia have risen four-fold over the past decade, topping $14 billion last year. “Today our two countries can celebrate as we take our partnership to a new level.”

Congress approved FTAs with Panama, Colombia and South Korea last October. Panama’s remains the only FTA that has yet to earn an effective date. South Korea’s was implemented on March 15.

For more information on international trade, visit FCIB’s website at www.fcibglobal.com.

Jacob Barron, NACM staff writer

It’s been a long, hard-fought trip to the finish line, one wrought with political and labor interests, even though a free trade agreement FTA between the United States and South Korea was forged some five-years ago. But now, barring a threatened yet unlikely veto by South Korea opposition lawmakers, the FTA is set to go into effect in a few weeks.

U.S. Trade Representative Ron Kirk and South Korean Minister for Trade Park Tae confirmed that the US-South Korea FTA will be fully in play on March 15. The deal's value is estimated at nearly $90 billion. Domestic manufacturers, especially in the automotive and agricultural products industries, stand to gain levels of market access with the Asian trade partner never realized before within said industries.  Approval of the FTA with South Korea as well as Panama and Colombia had long been seen as important to boost business for U.S.-based companies feeling the pinch of lower domestic demand. The FTAs, in theory, will significantly expand U.S. exports in those markets, help small businesses and lower tariffs on American goods. The Korean FTA was widely regarded as the most significant of the three new U.S. pacts and will be the first to go into effect.

(Note: More extensive background on the fight to establish the U.S.-South Korean FTA will be featured in this week's NACM eNews, available Thursday afternoon at www.nacm.org).

Brian Shappell, NACM staff writer
 

In his fourth State of the Union speech last night, President Barack Obama laid out his blueprint for the nation’s economy, starting with manufacturing.

“We will not go back to an economy weakened by outsourcing, bad debt and phony financial profits,” he said. “Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last—an economy built on American manufacturing, American energy, skills for American workers and a renewal of American values.”

The president also tipped his cap to a recent trend among businesses bringing jobs back from other countries historically thought of as sources of cheap labor. As previously reported, “insourcing” is now frequently taking the place of “outsourcing.” “We can’t bring every job back that’s left our shore. But right now, it’s getting more expensive to do business in places like China. Meanwhile, America is more productive,” said Obama. “A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home. Today, for the first time in 15 years, Master Lock’s unionized plant in Milwaukee is running at full capacity.”

“So we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it. Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed,” he added.

Obama went on to suggest tax reforms that would incentivize companies to bring jobs back to the U.S. and relocate to recession-hit communities. Exporting, which figured heavily into last year’s speech, also received a small amount of attention, mostly as the president burnished his credentials and highlighted the success of the past year’s free trade agreements (FTAs).

In essence, the speech focused on the idea of economic fairness. “The debate now will be over what constitutes fair,” said NACM Economist Chris Kuehl, PhD. “The speech had very little to do with the current condition of the U.S. and its economy, but that was expected in an election year. The overarching message is that the wealthy should be taxed more.”

“The fundamental issue driving the two sides remains how to deal with the debt at the same time the nation has to expand economic growth,” he added. “Without more revenue, the government can’t sustain current spending. Some would have that spending curtailed further while others assert that austerity is already compromising growth. The reality is that taxation and differing concepts of fairness will be at the heart of the election for the duration.”

Jacob Barron, CICP, NACM staff writer

With the lengthy holiday being celebrated in the United States, a few stories may have slipped past usually eagle-eyed credit professionals. Here are some happenings of note:

The “Big Three” credit ratings agencies (Standard 7 Poor’s, Fitch Ratings, Moody’s Investment Services) experienced a significant legal setback last week in the U.S. Supreme Court. It was ruled that the ratings agencies were not protected from lawsuits based on invoking rights under the First Amendment. The three had tried to use such a defense to protect itself from suits brought by investors who were burned after using the companies’ ratings information, which turned out to be far from accurate, about a half-decade ago. Still, two of the three agencies (Moody’s, Fitch) were cleared in said suit because of a lack of evidence.

In the Harrisburg Chapter 9 bankruptcy case, Judge U.S. Bankruptcy Judge Mary France found the Pennsylvania state law (Act 46) to be constitutional, ending the council's hopes of continuing the bankruptcy proceedings and avoiding state conservatorship. Act 46 forbids “third-class” (by population totals) Pennsylvania cities from declaring municipal bankruptcy prior to July 2012.  (Story at http://blog.nacm.org). A judge also intimated that a lack of cooperation/aggrement on the filing between the council and the embattled mayor made the filing inappropriate.

In Jefferson County, AL, where the largest U.S. bankruptcy filing the nation’s history is proceeding, Judge Thomas Bennett said he will not remove an appointed receiver charged with working on the county’s massive debt tied to a sewer renovation project. However, the judge intimate he could limit the receiver’s powers somewhat to give the county a little more influence over the Chapter 9 proceedings.

In the area of free trade agreements, South Korean lawmakers ignored a significant portion of the voter base fighting its pact with the United States over in fear of job losses or economic hits, and its ruling party called a hasty, surprise Wednesday vote. As a result, the FTA, one started during the Bush Administration and signed by President Barack Obama about one month ago, passed overwhelmingly but not before some unrest, including one opposing politician allegedly letting off some form of tear gas or pepper spray in parliament’s chambers. The deal’s value is estimated at nearly $90 billion. (Story at http://blog.nacm.org).

Struggling newspaper publisher Tribune Co., which has become a symbol of struggles in the newspaper/old media industry as well as a bit of a laughing stock based off of what looked like reckless and “old-boys’ club” internal policies, saw yet another reorganization plan filed in its bankruptcy. There’s no telling at this point if its prospects are any better than several other failed efforts of the past in the languishing proceedings.

Brian Shappell, NACM staff writer

Amid a surprisingly chaotic scene that puts the U.S. Congress’ bickering to shame, South Korea’s parliament voted overwhelmingly to approve a U.S.-South Korean free trade agreement (FTA) that has been in the works for some five years.

Though a significant portion of the voter base is against the measure in fear of job losses or economic hits, South Korea’s ruling party called a hasty, surprise Wednesday vote on the FTA, one started during the Bush Administration and signed by President Barack Obama about one month ago. One opposing politician even let off some form of tear gas or pepper spray in parliament’s chambers, reports indicate. The deal’s value is estimated at nearly $90 billion.

After years of languishing and political one-upmanship on both sides of the political aisle, the pact was among three Free Trade Agreement (FTAs) passed by Congress in October. Approval of the FTAs with South Korea, Panama and Colombia has long been seen as important to boost business for U.S.-based companies feeling the pinch of lower domestic demand. The FTAs, in theory, will significantly expand U.S. exports in those markets, help small businesses and lower tariffs on American goods.

Getting the measure through though saw U.S. supporters and opponents alike coming from both political parties as the idea of job protectionism divided lawmakers more on regional lines than the usual partisan ones. In South Korea, the divisions seemed to come from a two groups: big business versus the middle class and working poor. Some paint the deal as more beneficial to the United States and more of a move for the sake of appearances and posturing on the part of Seoul.

The Korean vote was seen as the last significant hurdle to implementation of the FTA, widely regarded as the most significant of the three new U.S. pacts.

Brian Shappell, NACM staff writer

President Barack Obama signed three free trade agreements (FTAs) with Panama, Colombia and South Korea into law last Friday. The three agreements had been pending since their original establishment during the Bush Administration.

Each FTA was enacted in its own bill, clearing the way for each of them to enter into force and make exporting to these three countries easier than ever. Including Panama, Colombia and South Korea, the U.S. has now negotiated FTAs with 20 nations.

The agreements could potentially generate a windfall for several industries and create several thousand new jobs. “We’re eager for American businesses and workers to begin reaping the benefits of these hard-won agreements,” said United States Trade Representative Ron Kirk following the President’s signature. “We know that more exports of Made-In-America goods and services flowing to consumers and Korea, Colombia and Panama can support tens of thousands more jobs here at home. Supporting more American jobs with responsible trade policy has always been our goal.”

Responses from Congress were also uniformly ecstatic over the passage of FTAs that were considered by many to be long overdue. “Today’s signing of three jobs bills passed by Congress last week shows America is getting back in the game. Finally, we are sending a signal to our competitors and allies alike that the United States is committed to a robust trade agenda that levels the playing field for workers in Michigan and across America, consumers and businesses and creates new markets for our goods and services,” said Rep. Dave Camp (R-MI), chairman of the House Ways and Means Committee. “But it’s more than that—with 95% of consumers living outside of the United States, we have to move ahead with such agreements or else our competitors in Europe and Canada will seize these markets from us and from our workers.”

“I commend the President for realizing that these trade agreements are a catalyst for creating hundreds of thousands of American jobs, something our economy desperately needs right now,” he added.

Jacob Barron, CICP, NACM staff writer

The Export-Import Bank of the United States Reports authorized $32 billion in export financing in FY 2011 (Oct. 1, 2010-Sept. 30, 2011), which supported more than $40 billion worth of exports, according to statistics unveiled Thursday by the organization.

Fred Hochburg, Ex-Im Chairman/President, noted the particular growth in authorizations for small businesses to $6 billion for the year, about double the level posted just three years ago. He said small businesses were a key part of President Barack Obama’s loft goals for exporting through 2014.

“We’re not going to double exports unless we double small business exports,” he said. “We’re leveling the playing field and making sure small companies and large companies can go toe-to-toe with foreign companies, and we do it at no cost to the U.S. taxpayer.”

Hochburg said among other considerable increases in Ex-Im funding was one in the renewable energy sector, up from $30 million three years ago to $720 million in FY2011 for financing for foreign buyers to purchase from U.S. companies in the industry, largely on projects/partnerships in areas of Canada, India and Turkey. Mexico, however, remains the largest national market for Ex-Im authorizations. Columbia grew the most in 2011, a point not lost on Hochburg during a question-and-answer session Thursday, one day after Congress passed a free trade agreement between the Latin nation and the United States among a trio of pacts.

“Of the three, Columbia offers most promise where we [Ex-Im] can play a role,” he told NACM. “There’s a lot of promise, the business community leans forward and it’s right in our back yard.”

Ex-Im authorizations for 2010 of about $24.5 billion, a record until the latest statistics, supported $34.4 billion worth of exports and 227,000 American jobs at more 3,300 U.S. companies.

Brian Shappell, NACM staff writer

After years of languishing and political one-upmanship on both sides of the political aisle, three Free Trade Agreement (FTAs) were passed Wednesday by both houses of Congress and awaits what should be a rapid signature by President Barack Obama.

Approval of the FTAs with South Korea, Panama and Colombia has long been seen as important to boost business for U.S.-based companies feeling the pinch of lower domestic demand. The FTAs, in theory, will significantly expand U.S. exports in those markets, help small businesses and lower tariffs on American goods.

Getting the measure through though has seen supporters and opponents alike coming from both political parties as the idea of job protectionism divided lawmakers more on regional lines than the usual partisan ones.

Obama submitted the nation's three pending free trade agreements (FTAs) to Congress earlier last week amid growing support for the measures. Obama, branded by some in the past as anti-business, has become increasingly pro-exporting and is in the midst of a federal push to double exports within five years.

Congressional leaders have been quick to laud the FTAs’ passage while lamenting the lengthy delay between their creation and their submission for approval. Among reasons for disappointment is that other agreements that, despite being started at a later date, were enacted months before Wednesday’s eventual positive vote. Among them was a European Union deal with South Korea.

Submission of the FTAs by the president was previously contingent on Congress' renewal of the Trade Adjustment Assistance (TAA) program, which trade workers perceived to be negatively affected by international competition. After a pared-down version of the TAA was approved in the Senate, however, the president submitted the agreements to the House, which somewhat begrudgingly followed through on the TAA renewal in addition to the FTAs.

Brian Shappell and Jacob Barron, NACM staff writers

A happy U.S. Chamber of Commerce has weighed in on the White House's move Monday to send three long-delayed free trade agreements (FTA's) with South Korea, Panama and Columbia -- featured as story #4 in last week's NACM eNews at www.nacm.org/enews.html -- on to Congress for what appears to be an imminent vote, applauding the action.

From U.S. Chamber of Commerce:

"'America is finally getting back in the game,' said U.S. Chamber President and CEO Thomas J. Donohue. 'These agreements are about creating jobs and ensuring a level playing field for trade.'

The trade accords will immediately eliminate tariffs on most U.S. exports to the three countries. Colombia currently collects $100 in tariffs on U.S. exports for every $1 the United States levies on Colombian goods, and a similar lopsidedness holds back U.S. exports to South Korea and Panama as well.

In addition to ensuring fairness and accountability, the agreements will open services markets and strengthen intellectual property rights.

The European Union-Korea Free Trade Agreement and the Canada-Colombia FTA entered into force on July 1 and August 15, respectively. Korea has eliminated tariffs on more than 90% of EU goods, leading to increased sales and market share for European companies while U.S. market share has declined."