[Congressional Record Volume 157, Number 153 (Thursday, October 13, 2011)]
[Senate]
[Pages S6499-S6502]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTERNATIONAL TRADE
Ms. LANDRIEU. Madam President, I come to the floor today to speak on
an issue that is of great importance to my home State of Louisiana:
international trade. From its founding, Louisiana has been a hub for
trade and entrepreneurship. In fact, the French explorer Bienville
chose the site for the city of New Orleans in 1718 because, at a
crescent bend in the Mississippi River, it is close to the Gulf of
Mexico but safe from tidal waves. President Thomas Jefferson later made
the Louisiana Purchase in 1813 to increase opportunities for U.S.
traders and protect U.S. access to the Port of New Orleans. Ever since
then, Louisiana and the Mississippi River have been the gateway to the
economic heartland of the United States. For example, 60 percent of all
grain exported from the United States is shipped via the Mississippi
River. It is also a little known fact that the Port of New Orleans
imports more steel than any other port in the country. This crucial
port sees more goods leave its docks each day than almost anywhere in
the Nation. Studies have found that the Port of New Orleans pumps $882
million into the Louisiana economy and helps sustain more than 160,000
jobs. The reality is Louisiana's ports are America's ports and the
gateway to the world. There are 31 ports in the State of Louisiana and
some of the busiest in the world in terms of gross tonnage. Five of the
31 ports in Louisiana, from the Gulf of Mexico to Baton Rouge, are
deepwater ports. We are home to 5 of the country's top 13 ports,
exporting more than $40 billion in goods last year alone and making
Louisiana the fourth largest exporting State in the country. Louisiana
sends everything from sugar to oil to more than 200 countries
worldwide. Port Fourchon supports infrastructure that provides 18
percent of the Nation's entire oil supply. The Port of South Louisiana
exports more than any other port in the country. When combined with the
nearby Port of New Orleans, these ports form the fourth largest port
system in terms of volume handled. Today New Orleans hosts an
Australian Trade Office, a Mexican Consulate, a French Consulate, and
countless honorary consuls. For all of these reasons, I do all I can
here in the U.S. Senate to promote exports from Louisiana. These
exports mean jobs in my State--from the suppliers, to the
manufacturers, to the shipping companies, to the port workers.
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I support the trade promotion agreements with Colombia, South Korea,
and Panama. This is because I believe that these agreements are fair
and present excellent opportunities for Louisiana companies. Since
coming to the Senate in 1996, I have been a strong supporter of free
trade. However, my first priority is our local businesses and workers
in Louisiana. For example, I voted against the Central American Trade
Promotion Agreement in 2005. I voted against this agreement because I
did not feel that the agreement was fair. Free trade requires that all
players operate on as level a playing field as possible--accountable to
the same labor laws, environmental standards, and governmental
intervention.
A main reason that I am able to strongly support these three
agreements is that the Congress just passed the extension of the Trade
Adjustment Assistance, TAA, Program. Congress created TAA in 1962 to
help workers and firms adjust to dislocation that may be caused by
increased imports. The program assists workers who lose their jobs or
whose hours of work and wages are reduced as a result of imports. In
2010 alone, 12 TAA petitions were certified in Louisiana, providing
almost $5 million in Federal funds, and most importantly, assisting
1,309 workers.
An example of a key business that benefitted from TAA is the Georgia
Pacific plywood plant in Logansport. Georgia Pacific was the largest
employer in Logansport and in October 2007 it announced that it was
immediately closing its local plywood operation, putting 280 employees
out of work. The Department of Labor determined an increase in imports
contributed to the plant closure, making these workers eligible for TAA
benefits. Furthermore, in November 2008, over 500 workers in Bastrop
were laid off because of the closure of the International Paper Mill. I
worked closely with U.S. Representative Rodney Alexander to secure TAA
assistance for these workers in 2009. These workers in Logansport and
Bastrop are but two examples of how important this program has been in
assisting workers in Louisiana impacted by increased imports.
In terms of the pending trade promotion agreements, in my view,
Colombia presents the most economic opportunities for Louisiana
businesses. Colombia is a fast-growing market of 45 million consumers.
This makes it the second largest country in Latin America and the third
largest economy in the region. It purchases more U.S. products than
Russia, Spain, Indonesia, or Thailand. The United States is also
Colombia's largest trading partner in terms of exports and imports.
Two-way trade between the countries accounted for more than $28
billion.
While these figures sound promising for U.S. exports to Colombia,
they do not tell the whole story. In order to keep competing for
Colombia's consumers, we must view trade with Colombia as a marathon,
not a sprint. The United States is Colombia's top supplier today but
China is closing fast on our heels. China has increased its share of
the Colombian market sixfold in the last 10 years. Imports from China
increased 47 percent in 2010, compared to the previous year. At the
current pace, China will displace the United States as Colombia's main
trading partner in less than a decade. For my part, I do not intend to
concede the race before it is won. Colombia has long been one our
closest allies in South America and is making great strides in curbing
decades of violence caused by drug cartels, paramilitaries. To concede
the Colombian market to China after years of cooperation on economic
and strategic interests is unwise. It is particularly unwise and
shortsighted as Colombia is an emerging market close to our shores.
Colombia has also recently signed agreements with Canada, the European
Union, and South Korea that present challenges to U.S. companies
competing in the country. Other countries are not standing still on
trade opportunities with Colombia and neither should the United States.
As of 2010, Colombia was Louisiana's 12th largest export market with
$727 million in exported goods. This is down from highs of $856 million
in 2007 and $1.5 billion in 2008. The decline in exports is attributed
in large measure to a reduction in U.S. agricultural market share in
Colombia since 2008. U.S. farmers saw their market share decrease from
46 percent in 2008 to 21 percent in 2010. The reduction stems in part
from Colombian agreements with other countries, such as Argentina and
Brazil as well as tariffs on U.S. goods as high as 20 percent. Tariffs
result from the absence of a bilateral trade promotion agreement, TPA,
between the United States and Colombia. That is a major reason I
believe the Colombian Trade Promotion Agreement can benefit Louisiana.
According to the U.S. Department of Agriculture, Louisiana is
currently the third largest exporter of rice in the United States with
$136 million in total rice exports. However, U.S. rice exports to
Colombia currently face tariff rates from 5 to 20 percent. Under the
TPA, Colombia will establish a 79,000-ton, zero-duty rice tariff rate
quota, TRQ, that will grow 4.5 percent annually for 19 years. Louisiana
rice exports to Colombia could increase by more than $3.2 million per
year. Funds from companies bidding on rights to export rice to Colombia
duty free will go to research boards in the six biggest rice production
States, including Louisiana. This is estimated to be as much as $10 to
12 million per year.
As with other agricultural products, since 2008, U.S. soybean exports
were down significantly to Colombia as the United States lost market
share in the country and tariffs ran as high as 20 percent. In 2010,
the United States exported $103 million of soybeans and soybean
products. This was a 21-percent drop in U.S. soybean exports from 2009
to 2010 and followed a 51-percent drop from 2008 to 2009. Under the
TPA, Colombia will immediately eliminate duties on soybean imports from
the United States. Colombia will also establish a 31,200-ton, zero-duty
rice tariff rate quota for crude soybean oil that will grow 4.5 percent
annually. Louisiana soybean exports to Colombia could increase by more
than $600,000 per year. Lastly, the country will also phase out its 24-
percent tariff for refined soybean oil over 5 years.
Furthermore, in 2010, the United States exported $100 million of
cotton to Colombia. Under the TPA, Colombia will immediately eliminate
duties on cotton. Louisiana cotton exports to Colombia could increase
by more than $710,000 per year. This provides duty-free opportunities
for Louisiana cotton producers to gain a new partner to spin, cut, and
sew our Louisiana cotton for textiles instead of exporting raw cotton
to China. This could provide a double benefit to the U.S. economy as
our cotton exports to Colombia are used in many apparel items that
Colombia then exports back to the U.S. market.
Outside of agricultural products, there are also benefits to other
industries in Louisiana from increased opportunities in Colombia. For
example, according to the U.S. International Trade Commission, the TPA
will result in an annual increase of 23 percent, to $1.9 million, in
U.S. exports in chemical, rubber, and plastic goods to Colombia. Why is
this important to Louisiana? As you may know, Louisiana hosts 90 major
chemical plants and 300 petrochemical manufacturers that directly
employ 27,000 skilled workers. The State supplies infrastructure
required for world-class manufacturing combined with the necessary
service providers--more than 1,000 Louisiana service companies support
the petrochemical industry. From 2008 to 2010, 15 percent of the $937
million in goods exported to Colombia consisted of chemical products.
Colombian tariffs on Louisiana chemical exports range as high as 20
percent. Under the TPA, 86 percent of U.S. chemical exports would
immediately receive duty-free treatment. This will significantly help
Louisiana chemical companies looking to export to Colombia.
Next, under the TPA, Colombia will immediately eliminate its tariffs
on 75 percent of U.S. plastics exports. An example of how this benefits
one Louisiana product is that the State exported almost $6 million
worth of polyethylene, a plastic widely used in packaging materials, to
Colombia in 2010. This product would see almost $900,000 in duty
savings.
Louisiana companies in the oil and gas machinery and services
industries also stand to benefit greatly from the TPA. According to the
``Oil and Gas Journal,'' Colombia has 1.9 billion barrels of proven
crude oil reserves in 2011,
[[Page S6501]]
the fifth largest in South America. These reserves are expected to
increase with the exploration of several new blocks that were auctioned
in 2010. The Energy Information Administration projects that Colombian
oil production will surpass the 1 million barrel per day mark during
the third quarter of 2012. Also, as of 2010, there were natural gas
reserves in Colombia of 4 trillion cubic feet. Because of the huge
potential of these reserves, the Colombian Government has made oil and
gas exploration and production a top priority.
Currently, Louisiana companies exporting oilfield equipment to
Colombia face tariffs of 10 percent or higher. They also face growing
competition, with 11 percent of the market in 2009 from Chinese
companies at lower costs, but lower quality and reliability in relation
to U.S. products. Under the TPA, Colombia will immediately eliminate
tariffs on 52 percent of U.S. energy equipment exports. Tariffs on an
additional 6 percent of exports would be eliminated after 5 years and
the remaining 42 percent would be eliminated after 10 years. This
allows our highly skilled oilfield companies in Louisiana to get more
of their quality products into the Colombian market at lower prices.
I also understand that the U.S.-Colombia Trade Promotion Agreement
includes strong protections for workers rights. These protections were
strengthened further this year by a labor action plan agreement between
President Obama and President Santos. The concerns this plan addresses
are: violence against Colombian labor union members, inadequate efforts
to bring murder suspects to justice, and insufficient protection of
workers rights in Colombia. The action plan included major steps that
the Colombian Government had to undertake before the trade promotion
agreement would enter in force. Key to these reforms included the
creation of three ministries: Labor, Justice and Housing. The new Labor
Ministry will be responsible for implementing programs to protect labor
rights. I also believe that the Colombian Government's efforts to turn
the tide on the long-running terrorist insurgency will promote long-
term stability in Colombia and the region. This is because a great deal
of the violence seen in Colombia over the past decades was fueled by
drug money funneled to paramilitary groups and criminal organizations.
As the Colombian Government has recovered more control over its
territory and demobilizing these groups, it is seeing increased
security, social progress and economic growth.
I have presented facts and figures, but let me give you an example of
a Louisiana company that has already had success in Colombia. Textron
Marine and Land Systems, based in New Orleans, manufactures armored
personnel carriers and armored security vehicles. They are four-wheeled
vehicles that have multiple layers of armor to defend against small
arms fire, land mines, and explosive devices. Both of these vehicles
have an impressive track record around the world and are vital to the
U.S. and coalition forces in Iraq and Afghanistan. Textron builds these
vehicles for the U.S. Army at their plants in eastern New Orleans and
Slidell.
With the help of the U.S. Foreign Commercial Service, Textron was
able to secure a $45.6 million contract in 2009 to provide 39 armored
personnel carriers for the Colombian Army. These vehicles were
delivered to the Colombian Army and see daily service throughout the
country protecting their soldiers. Not only did these exports help
promote peace and security in Colombia, but they allowed Textron to
maintain its workforce and continue the vehicle line into the future.
Textron was so successful with this first order that Colombia has
requested another 38 armored security vehicles. The combined value of
both contracts is more than $80 million. In addition to these vehicles,
Textron is working closely with the Colombian Government to create a
Center of Excellence for vehicle maintenance in the country. This
center would develop maintenance and supply systems to cover all the
Colombian armored security vehicles with the potential to cover all
other vehicle fleets owned by the government. The company also helped
lead a 2009 trade mission of 12 Louisiana companies to Colombia. I
applaud Textron, as well as our local U.S. Foreign Commercial Service
staff in New Orleans, for promoting these exports in Colombia. Textron
is a great example of a Louisiana company that has not just succeeded
in tapping this market--they continue to succeed in Colombia. Under the
trade promotion agreement, I am optimistic that more Louisiana
companies will be able to follow in Textron's successful footsteps.
In regards to the South Korea Trade Promotion Agreement, this is
another promising, high-growth market for U.S. companies. Korea has an
economy at close to $1 trillion and is the eighth largest trading
partner of the United States. Korea's economy grew 5.8 percent in the
second quarter of 2010 and the International Monetary Fund expects it
to grow by 6.1 percent in 2010. There also is currently a trade deficit
between Korea--$11 billion in 2009. The trade promotion agreement is
estimated by the International Trade Commission to improve the trade
balance with Korea by $3.3 billion to $4 billion. Lastly, I am aware
that as in Colombia, the European Union, EU, signed a trade promotion
agreement with South Korea on July 1, 2011. This agreement eliminated
98.7 percent of the Korean tariffs on EU products. U.S. companies are
now at a sharp competitive disadvantage in this growing market. We used
to be Korea's top trading partner but now have taken a backseat to
China, Japan, and the EU. Over the last decade, China's market share
increased in Korea from 7 percent to 18 percent alone while U.S. market
share flipped from 21 percent to 9 percent. So this is another instance
where inaction on a bilateral agreement could cost the United States
dearly on Korean market share, missed export opportunities, and most
importantly, lost job opportunities here at home.
Overall, I note that Korea bought $3.9 billion in agricultural
products in 2009, making Korea our fifth largest agricultural export
destination. This is despite the fact that Korea's tariffs on imported
agricultural products average 54 percent, compared to the average 9
percent levied by the United States on the same type of imports.
According to the American Farm Bureau Federation, exports by American's
ranchers and farmers to Korea will increase by almost $1.8 billion
every year under the agreement. This is attributed to increases in
exports of grain, oilseed, fiber, fruit, vegetable, and livestock
products.
Louisiana farmers stand to benefit greatly from these reductions in
agricultural tariffs in Korea. For example, as the agreement eliminates
tariffs and other barriers on most agricultural products, this
increases export opportunities for Louisiana cotton, beef and soybeans.
I have heard from my soybean farmers in Louisiana that they have tried
in the past to develop a market in Korea, but have had difficulty. They
are optimistic that the agreement will help efforts to establish a
market in Korea--particularly with getting soybean products into
Korea's livestock industry.
One company that should benefit from the Korea Trade Promotion
Agreement is Pontchartrain Blue Crab. As you know, Korea is the fifth
largest market for U.S. fish and fish product exports. Gary Bauer,
owner of Pontchartrain Blue Crab, PBC, has been in the blue crab
fishery for nearly 29 years. He began working in the industry as a
commercial fisherman in 1979, where he worked part time to support his
family. Mr. Bauer then established a seafood dock to service fishermen
from Lake Pontchartrain. Pontchartrain Blue Crab has grown from 4
employees to now more than 70 employees.
In 2002, PBC was able to create a blue crab processing plant located
in Slidell, LA, which then allowed the company to pasteurize crab into
exportable containers. Like other businesses in south Louisiana,
however, it had to rebuild its facilities following Hurricane Katrina.
With assistance from the Small Business Administration, SBA, Mr. Bauer
and his company were able to export into the Korean market. Their
success in Korea has encouraged PBC to also look into expanding into
the European market in the near future. So although PBC is already in
the Korean market, reductions in Korean tariffs offer new opportunities
for the company.
There are also benefits to nonagricultural businesses from this trade
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promotion agreement. One area that will greatly assist Louisiana
companies is reductions on tariffs on chemical exports. Currently
chemical product exports accounted for an average of $360 million per
year of Louisiana's exports to Korea between the years of 2008 to 2010.
However, Korean chemical tariffs average 6 percent but can run as high
as 50 percent. As such, U.S. exporters of chemicals and related
products, including chemicals, organic chemicals, plastics, and
fertilizers will see significant reductions in tariffs on their exports
to Korea. First, 50 percent of U.S. chemical exports will receive duty-
free treatment immediately after the agreement enters into force. The
remaining tariffs will be phased out over 10 years. Tariffs on such
products as silicon and plastics will also be eliminated immediately.
The third trade promotion agreement is with Panama. It is my
understanding that Panama is already a great market for U.S. exports,
even with an uneven playing field. U.S. products entering Panama are
subject to tariffs, but most products from Panama receive duty-free
treatment when entering the United States. The trade promotion
agreement will encourage further expansion and diversification of U.S.
exports in the country. With a major expansion of the Panama Canal, a
huge subway project in Panama City and development of the world's fifth
largest copper mine underway, the opportunities ahead for U.S.
companies in Panama are significant. By entering into a bilateral
agreement with Panama, the United States also ensures that our
companies can compete for contracts on the $5.25 billion Panama Canal
expansion project. EU and Canadian companies currently have the inside
track on these contracts because of their bilateral agreements with
Panama.
In terms of Louisiana, agricultural exports to Panama stand to
benefit greatly from the trade promotion agreeement. While the benefits
for the Louisiana rice industry as not as great as with Colombia,
duties on U.S. rice exports will be phased out over 20 years. There
will also be two separate tariff rate quotas established--one for rough
rice and one for milled rice. The milled rice TRQ in year one of the
agreement is 4,240 metric tons and will increase 6 percent each year
before becoming duty free in year 20. This TRQ qill allow for improved
access for Louisiana milled rice starting in the agreement's first year
of implementation. As I have indicated before, in 2010 Louisiana
exported $427 million in soybeans and soybean products abroad. The
Louisiana soybean industry will also see Panama lock in its current
zero-tariff treatment for soybeans and soybean meal after the agreement
is implemented. Panama is a smaller market than Korea or Colombia but
the country's geographic proximity to Louisiana presents unique
opportunities for our companies.
With that in mind, let me give you an example of a Louisiana company
currently working in Panama. Baker Sales Inc. of Slidell, LA, is a
small business that distributes imported steel tubing and fencing. When
construction slumped during the recession, so did demand for steel
products. They saw their sales drop 20 percent last year when oil/gas
contractors pulled orders after the Deepwater Horizon disaster. For 30
years, Baker Sales has imported steel products and sold them to
customers largely within a 200-mile radius of Slidell. The company has
always wanted to export--particularly recently as they identified
opportunities in Panama, where South American immigrants are moving in,
necessitating new housing developments and high-rises.
President Robert Baker paid $800 for U.S. Commercial Service's Gold
Key Service last March. He met with a dozen potential clients in Panama
over 2 days and one developer he met is interested in ordering $100,000
aluminum fencing. Thanks to the higher loan limits authorized by the
Small Business Jobs Act passed by Congress last year, Baker Sales Inc.
received a $3 million U.S. Small Business Administration 7(a) loan that
will help them expand their business by facilitating export
transactions with buyers in Panama. They immediately hired two more
employees because of the loan. As sales to Panama increase--and
potential sales to South Korea materialize--the company expects to hire
more employees.
In closing, as chair of the U.S. Senate Committee on Small Business
and Entrepreneurship, I am aware that cash registers are not ringing
like they used to for our small businesses around the country. For this
reason, exporting has become a practical solution for small businesses
looking to survive and grow. Small businesses across the country have
not only used exporting to weather the economic storm, they have proven
that what helps our entrepreneurs helps our entire economy. According
to the U.S. Department of Commerce, U.S. exports supported an estimated
9.2 million jobs in 2010--up from 8.7 million in 2009. Furthermore, for
every billion dollars of exports, over 5,000 jobs are supported. As our
country digs out of the economic crisis, helping more small businesses
export for the first time and current exporters reach new countries,
should be a top priority. I believe that small businesses can lead us
out of this recession by creating new and higher paying jobs and
lessening this trade deficit. These three trade promotion agreements
will further promote small business exports and help our companies
compete in these growing markets.
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