Fri. May 22, 2009; Posted: 10:29 AM
Caterpillar Chairman and Chief Executive Officer Jim Owens testified Thursday before the U.S. Senate finance committee in support of the Trade Promotion Agreement between the United States and Panama.
"Time and time again, we have seen the benefits of expanding our opportunities for trade," Owens said.
"In 2008 alone, Caterpillar exported more than $16 billion in products from the U.S., supporting tens of thousands of jobs."
Some senators are unhappy, however. Before there can be trade talk, they insist Panama clean up its bank secrecy laws which have turned it into a tax haven said to be robbing the United States of billions in tax revenues.
But Caterpillar said there is plenty of legitimate business to be done in Panama, only right now, company equipment sold to Panamanian companies carries up to a 10 percent sales tariff.
Caterpillar said tacking 10 percent on to the multi-million cost of the world's biggest off-road trucks built in Decatur hurts sales.
"Look at it this way," said Caterpillar spokesman Jim Dugan."If you were going to buy a new car, are choosing between two relatively identical vehicles, but one of them costs 10 percent less right off the bat, well, that is going to get your attention.
If this agreement passes, that 10 percent tariff goes away."
Dugan said Panama will definitely be in the market for the monster trucks and road graders built in Decatur.
The Panama Canal, the 95-year-old water bridge between the Atlantic and Pacific oceans, is due for a massive upgrade to expand its capacity to handle the giant cargo ships plying the seas today.
"Caterpillar customers who buy and use our machines built in Decatur will be bidding on this work," Dugan added.
And Caterpillar said that history shows every time a trade agreement is concluded, sales shoot up.
After the North American Free Trade Agreement, for example, Caterpillar exports to Canada and Mexico quadrupled. After a free trade agreement was signed with Chile, Caterpillar exports to that country tripled.
"A lot of those exports to Chile are mining trucks built in Decatur," said Dugan. "A lot of those exports to Canada are mining trucks built in Decatur. Those agreements are good for customers, good for Caterpillar and good for our employees."
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