Free Trade Fact of the Day
Conn Carroll /
The Colombia Free Trade Agreement before Congress now is splitting the former first family in two. Former President Bill Clinton is for it, and wanna-be-President Hillary Clinton is against it. Organized labor is a lot less divided on the issue, despite the fact that their opposition to the deal will only cost them due paying members in the long run. The Wall Street Journal examines just one company that would be hurt by organized labor short sightedness:
Exhibit A are 8,600 jobs at two Caterpillar Inc. factories in Illinois. Caterpillar exports more to Peru and Colombia than it does to Germany, Japan or the United Kingdom. So keeping and growing market share in both countries is important to union members in both plants. Not all are union jobs but both facilities are United Auto Worker shops.
Consider exports of the off-highway truck, made in Decatur. Customers in Colombia now pay a 15% tariff – equal to $200,000 – on the import of these vehicles. If the FTA goes through, that import tariff goes to zero immediately. Conversely, if the deal dies and Colombia, which is trying to expand its world trade, strikes an agreement with another country where similar vehicles are made, U.S. exports will immediately be at a 15% price disadvantage.