• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Congress and the President on Free-Trade Pacts: "Frankly, My Dear..."

Congress and the President on Free-Trade Pacts: "Frankly, My Dear..."

October 4, 2010
Robert J. Bowman, SupplyChainBrain

The decade of the nineties was a time of sound and fury over trade pacts, especially the North American Free Trade Agreement (NAFTA). The topic loomed large in the presidential campaigns of 1992 and 1996, with spoiler candidate H. Ross Perot fuming (what didn't cause Perot to fume?) over what he saw as a sellout of American labor and business interests to foreign competition. The air was thick with bluster, exaggeration and political rhetoric, but you know what? I'd prefer that to the stony indifference that marks our government's attitude to trade agreements today.

Some people still care. One of them is Carlos M. Gutierrez, U.S. Secretary of Commerce under President George W. Bush from 2005 to 2009. He's also the former chief executive officer and chairman of Kellogg Company, as well as founder and chairman of Global Political Strategies, a consultancy on international relations and economics. Kicking off last week's annual conference of the Council of Supply Chain Management Professionals, Gutierrez rang the bell for free trade. I wonder whether anyone outside the halls of the San Diego Convention Center was listening.

Start with NAFTA, creator of the world's largest free-trade area. It's more than 16 years old, but still an infant by some standards. Chief among them is the issue of trucking access. Pressure from U.S. unions has blocked the provision that allows Mexican trucks to operate on U.S. roads - ostensibly due to concerns over safety. Initially, NAFTA was to permit access within a 25-mile commercial zone along the U.S.-Mexico border, expanding to all U.S. states by Jan. 1, 2000. That hasn't happened, and cross-border trucking continues to be a highly inefficient process. NAFTA is a major reason why trade between the three participating countries grew by 198 percent between 1993 and 2006, to $883bn, but its potential hasn't been fully realized in part because of the impasse over trucking.

Meanwhile, three additional FTAs are languishing in Congress, unratified.

The proposed U.S.-Colombia Trade Promotion Agreement seeks to cure the imbalance in the treatment of imports by the two countries. (U.S. exporters pay duties going into Colombia, while Colombian imports enter the U.S. duty-free.) An agreement on trade could also help to curb the power of Colombian drug lords, while strengthening U.S. diplomatic interests in Latin America. Sound like a good deal? "Because of politics and special interests, that agreement has been held up [in Congress] for four years," Gutierrez said.

The Panama Trade Promotion Agreement was signed in June of 2007 and approved by Panama less than two weeks later. It has not been ratified by the U.S. This despite the big jump in commercial activity promised by the expansion of the Panama Canal, with the addition of a third set of locks by 2014. The implications for the western hemisphere and the world are "huge," said Gutierrez. Ports are scrambling to accommodate the ships that will sail through the widened canal. Meanwhile, with the agreement stalled in Congress, the Chinese are positioning themselves to take full advantage of the project.

Work began in 2006 on a U.S.-Republic of Korea Free Trade Agreement, and the treaty was signed a year later. Only the second FTA to be sought between the U.S. and an Asian country (after Singapore), it would also be the second-largest to be concluded since NAFTA. What's more, it would send a message to China and Japan "that we have a partner," Gutierrez said. "It would be huge for our standing in Asia." In the wake of the bilateral negotiations, he noted, South Korea took the bold and politically dangerous step of accepting some imports of U.S. beef. Nevertheless, the Korean FTA hasn't been submitted for a vote by Congress.

"We are not moving ahead," said Gutierrez. "The rest of the world is cutting free-trade agreements right and left." The U.S. remains the wallflower in the corner of the social, watching while everyone else's dance cards get filled up.

There's an even bigger development that threatens to toss that wallflower from the dance hall into the parking lot. It's ASEAN + 3, a developing trade partnership among the 10 members of the Association of Southeast Asian Nations and the economic powerhouses of China, Japan and South Korea. This one, said Gutierrez, "has the biggest possibility of changing the game."

Most of all, ASEAN + 3 advances China's goal of asserting economic leadership over Asia. Gutierrez laid out the three cornerstones of that strategy: the push for a harmonious domestic society, in which nobody "rocks the boat"; a focus on technology and scientific development, and a commitment to a "peaceful rise" in the world. That last phrase describes a foreign policy that rejects attempts to dominate the U.S. militarily - an effort that China is likely to lose - in favor of economic superiority through regional cooperation. In China's ongoing chess game with the U.S., ASEAN + 3 "is not a checkmate move," said Gutierrez. "But it's a big check."

So on one hand, we have China and a multitude of partners seeking to form an immensely powerful trading bloc. On the other, Congress and the Administration making like Rhett Butler at the end of Gone With the Wind, sitting on three potentially valuable FTAs and failing to realize the full benefits of a fourth. Any guesses on who will dominate the global economy in years to come?

Comment on This Article

RELATED CONTENT

RELATED VIDEOS

Regulation & Compliance Retail
KEYWORDS Asia Pacific Latin America North America Regulation & Compliance Retail
Robert J. Bowman, SupplyChainBrain

Watch: Four Industry Disrupters Impacting Logistics

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • A GIANT EXCAVATOR BEARING THE JOHN DEERE LOGO SITS IN A FIELD IN DAPPLED SUNLIGHT

    EVs Finally Land at North America’s Biggest Machinery Conference

    Technology
  • A ROW OF HOT AIR BALLOONS CONTAINS A ROCKET ZOOMING PAST THEM

    When Adopting New Tools for the Supply Chain, Don’t Forget Change Management

    Technology
  • A mature male architect stands with his arms crossed at a building site

    Biden Wants American-Made Construction Materials. Is That Feasible?

    Sourcing/Procurement/SRM
  • DEEPLY CRACKED EARTH UNDER A BLUE CLOUDY SKY

    It’s Time to Embed Climate Considerations Into Supply Chain Strategies

    Sourcing/Procurement/SRM
  • TWO HANDS IN SHIRT CUFFS SHAKE AGAINST A BACKGROUND OF A US FLAG

    Podcast | Leaving China: Is ‘Friend-Shoring’ the Answer?

    Sourcing/Procurement/SRM

Digital Edition

Scb q1 2023 cover

2023 Supply Chain Management Resource Guide: Packing for a Difficult Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Holman Logistics Honeywell Intelligrated
IFM Infor Inmar
Keelvar Kinaxis Korber
Lean Solutions Group 2H Liberty SBF Locus Robotics
Logility LogistiVIEW Lucas Systems
MCA Connect MPO Nvidia
Old Dominion OpenText ORTEC
Overhaul Parsyl PMMI
QIMA Redwood Logistics Ryder E-commerce by Whiplash
Saddle Creek Logistics Schneider Dedicated Setlog Holding AG
Ship4WD Shipwell Shyft
Sourcemap Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing