Wednesday, Oct. 12, 2011 | 7:51 p.m.
Congress approved bills Wednesday night to establish new free trade zones with South Korea, Colombia and Panama, bringing a years-long process to an end just hours before South Korea’s president is set to address a joint session of Congress.
The South Korean free trade agreement is the largest the U.S. has concluded since the North American Free Trade Agreement in 1993. But NAFTA is among the reasons why Nevada’s Democrats didn’t vote for the new agreements.
“I’m not a big fan of free trade agreements,” Sen. Harry Reid said this summer, when explaining why he resisted pressure to bring up the bills for so long. “I think if you ask people in Nevada, boy, hasn’t NAFTA helped us a lot? Heh, they would just sneer and walk away.”
While the House urged passage, Reid used his control of the Senate schedule as majority leader to set a precondition to a vote on the free trade agreements. He wanted Congress to pass Trade Adjustment Assistance (TAA), a program to retrain workers who lose jobs as a result of free trade agreements.
The White House went along with Reid, refusing to transmit the free trade agreements so they could be voted on after TAA cleared the House and Senate.
This week, Reid also scheduled a vote in the Senate to censure China for artificially depressing its currency before the trade agreements went through the House. It passed 63 to 35.
Reid supported the censure; Nevada Sen. Dean Heller didn’t, citing fears that censuring China might ignite a trade war.
They were necessary steps, though, Reid argued, to ensure something was done to protect the interests of American workers.
Rep. Shelley Berkley agreed.
“This [Colombian] trade agreement, taken together with the Panama and Korea trade agreements, will cost the nation 200,000 more jobs. How much more job loss can Nevadans be expected to stomach before we stand up and say enough is enough?” Berkley said.
“[The House] should reject these job-killing trade agreements, pass the China currency manipulation bill and let’s get on with the job of Congress, which is to create jobs for the American people, the American worker,” she said.
Neither Reid nor Berkley voted for any of the trade agreements, though they passed the Senate overwhelmingly. Reid, because he opposed the measures, left it to Montana Sen. and Finance Committee Chairman Max Baucus to steer them through the Senate.
Nevada’s Republicans, however, were proud to take votes in favor of the free trade agreements, stressing that the arrangements will increase Nevada’s ability to export and create jobs.
“Open trade policies have already unlocked markets for many of Nevada’s biggest employers, including mining and gaming,” Heller said. “With thoughtful safeguards in place, these agreements will continue to generate more business, create well-paying, skilled jobs in Nevada and draw millions of dollars into our state. Nevada still has to overcome a 13.4 percent unemployment rate, and these free trade bills are a move in the right direction.”
Republican Rep. Joe Heck offered a local example of how free trade has benefited Nevada, noting that Thunder Power, a Las Vegas company, will no longer pay an 8 percent tariff on the batteries it exports to Korea.
“These agreements will add to the more than 18,000 jobs already supported by products made in Nevada and sold around the world. We need to produce locally, but sell globally,” Heck said.
The tariffs won’t disappear immediately: under the agreement, they are phased out over a period of 5 to 10 years, depending on the commodity in question.
But that’s good enough for some Nevada companies, even those whose workers have previously qualified for TAA.
In a letter to Heller this week, International Game Technology’s chief legal officer, Robert Melendres, spoke highly of the free trade agreements in question. They will “help facilitate demand for IGT’s products in these international markets and spur manufacturing and development activities at IGT’s Nevada facilities in Reno and Las Vegas,” he wrote.
Companies like IGT, though, have also come under fire for relocating some of their operations closer to growing gaming centers — like Macau and China — at the same time they increase exports, costing U.S. workers jobs that are created elsewhere.
Economic development and tourism officials stress, though, that markets such as Macau aren’t stealing from the U.S. tourism base, because Macau is mostly frequented by Asians, and the number of tourists from Asia visiting the U.S. is on the rise.
That makes foreign outposts a net gain, says Nevada Commission on Economic Development chief Alan DiStefano, even if some jobs are lost.
“The profit comes back to that U.S. company, which repatriates that profit back to the US, and they grow their local business out of that,” he said.
Repatriation of corporate profits — a subject of a bill by Berkley — is likely the next trade-related fight in the congressional queue.
While disagreements persist, the free trade agreements, nonetheless, earned convincing majorities in the House and Senate. The House passed the South Korea agreement by a vote of 278 to 151, Panama by 300 to 129 and Colombia by 262-167. In the Senate, South Korea cleared by a vote of 83 to 15, Panama by 77 to 22 and Colombia by 66 to 33.