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Editorial | Island Voices

Free trade pacts will benefit Hawaii

    President Barack Obama and South Korean President Lee Myung-bak chatted at the G-20 summit in Seoul on Nov. 1.

President Barack Obama stands on the verge of asking Congress to ratify the long-awaited free trade agreement with South Korea and, hopefully, will later do the same for the agreements with Colombia and Panama.

It is clear that the U.S.-South Korea deal is a good deal for Hawaii. South Korea was our state’s third-largest foreign market in 2009. Hawaii sold $67 million in hard goods to Korea in what was a down year due to the recession. Those sales helped keep men and women employed in our state during tough times.

In the same year, South Korea was Hawaii’s No. 10 source of imports, supplying vehicles and consumer goods worth $123 million to our stores. This is stuff we use every day that helps keep our consumer prices down and provides retail employment in our islands. It’s not just kim chee.

The free trade agreement with South Korea will lower prices still further by getting rid of customs duties on most products. Perhaps more important, the FTA will hugely ease the burden of non-tariff irritations to trade in both directions, making it easier to move goods and also making Korea a far more attractive market for Hawaii’s services companies, such as those in financial services, telecom-

munications, or architecture and engineering. The U.S.-Singapore free trade agreement went into place seven years ago and Hawaii’s business with Singapore has boomed since then. No coincidence. And the same will happen with South Korea.

Colombia and Panama are unknown markets for most of Hawaii. That doesn’t mean we shouldn’t be there. Colombia is already our state’s 13th largest export market, albeit only about $9 million. And Panama doesn’t appear in our charts, so we are starting from a low base. But I’m not sure Hawaii has ever given these markets a decent try.

We naturally look west, to markets with which we have had some historic or cultural connection. And we don’t have large local ethnic groups with attachments to Latin America. But that doesn’t mean we can’t do good business there. Colombia is no longer the drug-torn country of the old headlines and is today one of Latin America’s most dynamic business centers.

Panama sits on the edge of a boom that will last for years while the Panama Canal is enlarged. There is no reason Hawaii shouldn’t take part in its success, and having free trade agreements in place will make it that much easier. True, Panama and Colombia are outside of our comfort zone, but how do you build business if you don’t try something new?

The South Korea FTA has been renegotiated to tend to issues that were not particularly germane to Hawaii. We have no automobile workers here and the only auto plant on the horizon would be – you guessed it – built by a South Korean automaker. Objections to the Colombia agreement center on the country’s old drug image and a history of mistreatment of union workers. That is, to a great extent, history now. A continued refusal to build business is unlikely to help Colombia’s workers, but an improving economy with increased trade will help. I can’t think of a cogent argument for waiting on the Panama agreement. It is time to tell our congressional delegation to get these agreements in gear. Hawaii needs and wants the business.

Stephen K. Craven chairs the Hawaii Pacific Export Council, a committee appointed by the U.S. secretary of commerce to help Hawaii, Guam, the Northern Marianas and American Samoa do business in foreign markets. He runs Kekepana International Services, an international business consulting firm.


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