California Apparel News

Even though the U.S. economy is in the doldrums, protectionist barriers shouldn’t be erected to impede the free flow of goods, according to former U.S. Trade Representative Mickey Kantor, who spoke recently at a trade event in Southern California.

“This nation has always been somewhat skeptical if not cynical about trade,” said Kantor, who was also secretary of commerce during the Clinton administration. “After the second World War, we did the right thing and opened up our market to European and Japanese goods and services. hellip; But Americans came to the conclusion that we gave away our markets. They said, ’We don’t mind competing, but we don’t want to give away our markets.’ And these skepticisms have begun to rise again. We are still fighting that same emotion, which makes it very difficult to move trade forward.”

Kantor was speaking at a May 15 luncheon in Long Beach, Calif., organized by the International Business Association of Southern California and the Long Beach Chamber of Commerce as part of World Trade Week 2009. Many of the attendees either worked for the Port of Long Beach or were employed by companies that depend on the port for their well-being, such as the BNSF railroad, which hauls cargo containers to inland destinations across the country.

Trade has been the fuel that fosters port growth, but no one in the audience had to be told that international trade is down. Recent statistics from the Port of Long Beach show that container volume during the first four months of 2009 plummeted 28.8 percent.

“Technology has driven us to a global economy that many of us would never thought would happen in our lifetime. It has become incredibly important. All of you live it every day, but around our country it is not as well understood as it should be,” Kantor said, noting that the country’s high unemployment rate of 8.9 percent makes people feel threatened by international trade and overseas manufacturing.

Despite many fears that President Obama wouldn’t support free trade, Kantor pointed out that the new president has appointed several free-trade advocates to key positions. One is Gary Locke, the former governor of Washington who is now the secretary of commerce. The other is Ron Kirk, the former mayor of Dallas who was recently confirmed as the U.S. trade representative. He worked with Kantor on the North American Free Trade Agreement.

Free-trade pacts

Kantor spent his years as the U.S. trade representative negotiating hundreds of trade pacts and led the U.S. negotiations that paved the way for the World Trade Organization.

He is bullish about two of the three pending free-trade agreements signed during the Bush administration but still awaiting congressional approval.

Kantor said the free-trade accord with Panama could be in force as soon as June 30, right before that country’s recently elected president, supermarket magnate Ricardo Martinelli, takes office on July 1. “There is a race to get it done by June 30,” noted the former trade representative, who now works for the international law firm Mayer Brown.

Kantor pointed out that the free-trade pact with Colombia still has some hurdles. “The Colombia free-trade agreement is difficult,” he said. “It is because of what has happened over the last year over right-wing death squads killing those involved in the labor movement.”

Colombian President Aacute;lvaro Uribe has tried to address the issue but still has a ways to go. Kantor would like to see this issue resolved soon. “We need to move forward with Colombia. They are a great ally of ours, one of the countries in Latin America that has been a friend and a supporter,” he said.

In recent years, Latin America has elected several left-leaning presidents, such as Hugo Chavez in Venezuela and Evo Morales in Bolivia, who have not been particularly eager to support free trade with the United States.

And as far as South Korea is concerned, the United States and that Asian country signed a free-trade agreement two years ago, but it awaits ratification by both countries.

“This agreement affects everyone in the room,” Kantor said, pointing out that South Korea is a major U.S. trading partner whose goods are shipped through the ports of Long Beach and Los Angeles.

South Korea does not want to open its market to U.S. beef. Fears of mad cow disease prompted a ban on U.S. beef several years ago. Neither does South Korea want to open its markets to U.S. autos, which would compete with Korean-made cars, such as Hyundai and Kia.

Asian giants

No trade topic would be complete without talking about Japan and China. Japan is the second-largest economy in the world and the United States’ third-largest trade partner. But that country’s economy has been in a deep recession.

While the Japanese government recently passed an economic stimulus bill, it has been mired in political infighting within the Japanese parliament. Once this issue is resolved, Japan’s economy can move forward, which will result in increased trade with the United States.

Economic growth is no problem in China. Its gross domestic product is predicted to shoot up 8.3 percent in 2010. “As we try to open up China even more with U.S. agriculture [exports],” Kantor said, “this will be good news for us.”

However, one issue that needs to be resolved is Taiwan. “For the Chinese, Taiwan is the most important issue on their agenda,” Kantor said.

He believes that Taiwan should be integrated into China’s economic and political system, much like Hong Kong and Macau have been in the last decade. “I would like to see some progress in that area,” he said. “If we don’t make progress in that area, we are not going to make much progress with China.”