Bush Calls For Passage Of Free Trade Agreements

In a post-election meeting with all of his cabinet secretaries and White House staff, President
George W. Bush called on Congress to approve the pending free trade agreements (FTAs) with Panama,
Colombia and South Korea during their lame duck session starting November 17. While the special
session will be devoted primarily to addressing measures to combat the current economic crisis,
extraneous issues often come up during lame duck sessions.

All three of the FTAs, approved months ago, have run into problems both in Congress and with
some manufacturing industries. Importers, for the most part, support them.

The National Council of Textile Organizations (NCTO) and other lobbying organizations are not
particularly concerned about Panama because there would be little textile trade involved. Some
members of Congress, however, have voiced their opposition, because of what they say are political
problems with Panama.

NCTO supports the pact with Colombia, because it has a yarn-forward rule of origin, and they
believe it can present some market opportunities for US yarn and fabric exports. US importers also
support the agreement, but it has run into big problems with the Democrats in Congress who are
concerned about human rights and labor abuses in Colombia.

Textile lobbyists, however, are strongly opposed to the South Korean agreement because South
Korea has a strong and vibrant textile industry, and they fear there would be a surge of apparel
imports without any offsetting market opportunities for US textiles in South Korea. The auto
industry and its supporters in Congress also have problems with the agreement, and US agriculture
interests are concerned about Korean restrictions on imports of beef.

The outlook for ratification in the special session is pretty dim.

November 11, 2008