Aaron Schock

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Schock Enroute to Colombia

Continues to Pressure Obama Administration to Send Trade Deal to Congress for Approval

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Washington, Apr 18, 2011 | comments

Congressman Aaron Schock (R-IL) left today on a congressional trip to Colombia. Schock is joined on the trip by Ways and Means Chairman Dave Camp (R-MI), Ways and Means Trade Subcommittee Chairman Kevin Brady (R-TX), Democratic Whip Steny Hoyer (D-MD), Co-Chair of the Colombia Caucus Gregory Meeks (D-NY) and Ways and Means trade subcommittee member Adrian Smith (R-NE). The United States has been in negotiations with the Colombian government to finalize a free trade agreement between the two countries. It has been over 1,600 days since the trade agreement was originally ratified by the Colombian government and must now be approved by Congress before being enacted. Schock a member of the Ways and Means committee, and the Trade subcommittee, has been tasked by Chairman Dave Camp (R-MI) to help gather support for final passage of the Colombian agreement.

The trip will serve as an opportunity for the Congressional delegation to visit with both American and Colombian officials. During the trip, Schock is expected to meet with Colombian President Juan Manuel Santo in addition to meetings with cabinet officials, labor leaders and employers. This is Schock’s second trip to Colombia. His first visit to Colombia was at the invitation of then Majority Leader of the House Steny Hoyer in 2008. 

“This will be my second trip to Colombia as a Member of Congress,” said Schock before departing on the trip. “Colombia is a strong American ally and they are a vibrant economic hub in Latin America. It’s vital to both our interest and theirs that this free trade agreement is finalized as soon as possible. I’m confident when we return from this trip, we will be on the path toward a Congressional vote and final approval before July 1.”

House Republicans have been pushing for a vote on all three pending free trade agreements with Colombia, Panama and South Korea by this summer.

In 2007, more than 80 percent of U.S. exporters to Colombia as well as Panama and Korea, were small and medium-sized enterprises. These firms exported $12 billion to Colombia, Panama and South Korea. Colombia’s GDP of over $430 billion is the 5th largest Latin American economy and the 3rd largest U.S. export market in Latin America behind Mexico and Brazil.

In 2010, two-way trade between the two countries was valued at $28 billion. However, since Colombia signed the trade agreement in 2006, U.S. products have been charged more than $3.4 billion in needless duties due to the delay in ratification by the United States.

Currently, 41 states export agriculture products to Colombia. Over 80 percent of United States exports of consumer and industrial products to Colombia will become duty-free immediately upon implementation of the Trade agreement. Over a five year period from 2004-2008, United States agriculture exports to Colombia grew at an average annual rate of 38 percent. More than 99 percent of total Colombia exports to the United States are already duty-free; however, the average tariff paid by U.S. exports to Colombia is 11.2 percent.

Schock and others on the Ways and Means committee have expressed urgency in finalizing the trade agreement, because Colombia has recently finished negotiations with the European Union on a free trade deal and has also concluded deliberations with Canada on a similar agreement expected to go into place on July 1. Both of these agreements will further disadvantage American producers unless the United States takes action on a similar agreement.

Schock notes that the Colombian trade deal would be an economic boost to his home state of Illinois and the 18th district as well. He cites as an example, Caterpillar, the Peoria based manufacturing company, exported nearly seven times more products to Colombia than to Korea last year; which is also more than the amount exported to Japan, India or Germany. In 2010, six of CAT’s top ten export markets were in Latin America and they saw a 58 percent increase in sales to Latin American, which is larger than any other market in the world.

Agriculture, the other primary economic driver in Central Illinois, would also benefit from the passage of this agreement. Illinois agriculture is a major supplier of grains to Latin America, and Colombia has been one of the top ten export markets for U.S. corn. During 2007-08, the U.S. exported 114 million bushels of corn to Colombia, with an estimated value of almost $500 million. According to the Illinois Farm Bureau, because of the delay in passage of the Colombia FTA, ‘Colombia pursued an agreement with Argentina, Brazil, and other MERCOSUR countries costing us $400 million in lost corn exports (and related jobs) alone in the last three years.’ With a trade agreement in place, the American Farm Bureau estimates that the value of American farming exports to Colombia would rise to $700,000,000, more than doubling current U.S. Agriculture exports.

“The longer we wait the more time we allow our international competitors the chance to enter into agreements with Colombia thus limiting our access and ability to aggressively compete,” said Schock. “Now is the time for the President to send Congress the Colombian free trade agreement for approval. There is no more time for delay; now is the time to vote,” stressed Schock.

POSITIVE IMPACT ON ILLINOIS AND THE 18TH DISTRICT
In 2010, six of Caterpillar’s top ten export markets were in Latin America; last year Caterpillar exported nearly seven times more products to Colombia than Korea. This was more than the exports to Japan, India or Germany. 92 percent of large mining trucks shipped from Decatur, IL are exported; 82 percent of large track type tractors shipped from East Peoria are exported. Caterpillar saw a 58 percent increase in sales to Latin America last year, which is larger than any other market in the world. 15,807 companies exported goods from Illinois in 2007. Of those, 89% are small and medium-sized companies which generate nearly 1/5 of Illinois total merchandise exports. 7.1 percent of total private sector employment in Illinois is linked to export supported manufacturing jobs, and 25 percent of all manufacturing jobs in Illinois depend on exports. Illinois’ share of exports to Colombia totaled over $270 million in 2009. Colombia has traditionally been one of the top ten export markets for U.S. corn, and during 2007-08, the U.S. exported 114 million bushels of corn to Colombia, with an estimated value of almost $500 million.

BACKGROUND
Congressman Schock founded the Colombia Caucus in the House of Representatives last year, which has been actively promoting the U.S. – Colombia Trade Promotion Agreement. Additionally, he visited Colombia in 2009 and met with Colombian President Alberto Uribe. Schock also recently met with new Colombian Vice President, and former labor leader, Angelino Garzon to discuss passage of the pending trade agreement. Congressman Schock has also hosted numerous events to inform his colleagues in Washington about the positive impact for American businesses of the U.S. – Colombia Trade Promotion Agreement..

Schock has been critical of the Administration’s failure to submit the trade agreement to Congress for approval since 2008 and most recently questioned Trade Ambassador Ron Kirk as to what more needed to be done to make the agreement ready for Congressional approval. Schock also offered an amendment on the Floor in the 111th Congress to study the economic impact of the failure to implement the U.S. – Colombia Trade Promotion Agreement.

An analysis by the U.S. International Trade Commission (ITC) estimates that U.S. exports to Colombia will increase by $1.1 billion. The ITC determined that the Agreement will add $2.5 billion per year to U.S. GDP. Over 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty-free immediately, with remaining tariffs phased out over ten years. The agreement reduces the average tariff faced by U.S. exporters by more than 68 percent, from 11.2 percent to 3.6 percent immediately upon implementation of the agreement. Currently all U.S. agriculture exports to Colombia face tariffs. Upon implementation of the agreement, 77.5 percent of Colombia’s tariff lines will become duty-free for U.S. exports. The American Farm Bureau estimates that the increase in U.S. farm exports to Colombia as a result of the agreement could exceed $690 million per year, more than doubling current U.S. exports.

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