Caterpillar Inc. Chairman and Chief Executive Officer Doug Oberhelman recentlyurged Congress to take action immediately to enact pending Free Trade Agreements (FTAs) between the United States and Panama, South Korea and Colombia.
Caterpillar has been a long-time advocate of free trade agreements and was instrumental in supporting the passage of FTAs with Mexico, Chile, Central America, the Dominican Republic and Peru. Since those FTAs went into effect, Caterpillar exports have increased substantially to those regions of the world—up fivefold to Mexico, threefold to Chile and up by more than 60% to Peru.
"The message about the success of FTAs is too important to get lost. American manufacturers can compete with anyone—provided they have open markets and a level playing field. Opening foreign markets is a fundamental competitive challenge for the United States to increase exports and generate more U.S. jobs. We need to open those foreign markets with a sense of urgency, before our competitors in Asia, Europe, South America and Canada leapfrog us with their own trade agreements," Oberhelman says.
In addition to helping U.S. manufacturers of industrial goods, the Panama Free Trade Agreement will substantially improve market access for U.S. farm products, consumer goods and services. It will bolster the rule of law, investor protections, internationally recognized workers' rights, transparency and intellectual property protections.
"We are pleased that Congress and many in the Administration now recognize the importance of trade with Latin America and other countries around the world. For Caterpillar, which exported more than $13.4 billion in goods from its U.S. manufacturing facilities last year, there is a tremendous opportunity to sell more mining trucks and scrapers made in Decatur, IL, and track-type tractors made in East Peoria, IL, to Panama as part of its canal expansion plans," Oberhelman adds. "The canal expansion is one of the biggest public works projects since the Three Gorges Dam in China. We are doing our best to earn the business associated with the canal and all the other infrastructure projects in Panama. And, if we can sell all our U.S.-produced products to Panama duty-free, it will help our customers and provide us with a competitive edge over products made in other parts of the world."
If enacted, a trade agreement with Panama would eliminate tariffs ranging from three to 10% on Caterpillar products exported from the United States. Additionally, a trade agreement with Colombia would eliminate tariffs ranging from five to 10%. These trade agreements would benefit the company, its employees and its customers.