Commerce official stumps for trade agreements

In a $50 trillion global economy that is growing 5 percent a year, why should Montanans care about four trade agreements that are pending in Congress right now?

For the 620 Montana companies who exported goods in 2005, lowering trade barriers and opening new markets could make a huge impact.

U.S. Assistant Secretary of Commerce David Bohigian on Friday pointed to a 4.6 percent unemployment rate, inflation that is under control and a strong economy that looks like it will continue despite terrorism threats, the energy crisis and the current credit crunch.

He was in Kalispell to tout the benefits of a proposed free trade agreement with Korea, where 49 million consumers live in a $1 trillion economy, and trade promotion agreements with Colombia, Panama and Peru.

Meeting with a dozen business leaders, Bohigian conceded that workers face a tough environment with constantly changing job categories and required skill sets.

Some things can be done to help on a national scale.

"My first goal is job creation," Bohigian told the group. Since August 2003, U.S. business and industry have created more than 8 million jobs, "more than the rest of industrialized nations combined."

A big driver in that, he said, is global trade expansion.

Domestic policies are the fulcrum in trade expansion, with three-quarters of the nation's trade growth credited to domestic growth. It brings not only new customers, he said, but new global competitors.

The Bush administration's quest to make a bigger dent into the trade deficit must focus on countries with which the U.S. has no trade agreement. Imports from those countries account for 95 percent of the nation's trade deficit. That deficit is due in large part to trade barriers the U.S. threw up during the Great Depression and the aftermath of the 1991-92 slump in the economy.

"We need to move forward," he said, crediting Sen. Max Baucus, D-Mont., with leading the fight in his chairmanship of the Senate Committee on Finance.

Trade promotion agreements with Panama, Peru and Colombia - whose economies are growing by 7, 8 and 9 percent annually - are a crucial link in continued U.S. trade expansion.

Just since the North American Free Trade Agreement was inked 14 years ago, U.S. exports have nearly tripled, he said, and the U.S. economy has doubled. The Bush administration, he said, has passed 11 trade agreements in the last four years.

Of those 620 businesses now exporting goods from Montana locations, 85 percent are classified as small and medium-sized companies with fewer than 500 employees.

Opening trade channels could allow those companies to boost production, hire more workers and pour more into the state's economy. In a small mom-and-pop company, the extra trade to support even a couple new workers could begin to transform the entire company.

But a free trade agreement with Korea, the world's seventh-largest economy and the 10th largest trading partner for the U.S., could have a profound impact of its own.

It could serve as a incentive for China to improve its manufacturing and export practices in order to retain its U.S. market share, Bohigian said. China's dismal performance is slowly improving - Bohigian cited better protections for intellectual properties - but "there's a lot to do still," he said.

A free trade agreement with Korea could provide "a counterweight to China," he said. "I think Korea is one way to get China in line."

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com