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INTERNATIONAL TRADE
(Senate - October 13, 2011)

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[Pages S6499-S6502]
                          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.

[[Page S6500]]

  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

[[Page S6502]]

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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