The State of Play on Trade

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U.S. tariffs on South Korean cars, currently at 2.5%, would disappear when the agreement is approved, and a 25% tariff on light trucks would be gradually phased out. That might allow Korea to take market share from U.S. companies or encourage Japanese automakers to shift production to the nearby nation, opponents say. Even while giving Korean automakers more access to the U.S. market, the agreement leaves various nontariff barriers in place for the U.S. auto industry, including higher taxes for cars with large engines and various other government regulations that favor Korean cars, says Lee of the AFL-CIO.

But supporters say the agreement does much to level the playing field in the auto industry and it's unrealistic to think a trade deal can make imports and exports balance out entirely. "There isn't a trade agreement that can guarantee a fixed, equal number sold in both directions," says John Murphy, the vice-president for international affairs at the U.S. Chamber of Commerce.

Where's the Beef?

The deal has also been sidetracked by a raging controversy in South Korea over beef imports. That country was the third-largest export market for U.S. beef, but stopped imports in 2003 after mad cow disease was diagnosed in an animal from Washington State. In April, Korea agreed to begin taking U.S. beef again. But that sparked mass marches in the streets of Seoul that threatened to overturn the South Korean government. Korean importers subsequently got U.S. meat companies to agree to ship meat only from cattle that are less than 30 months old, which are considered to have a lesser risk of carrying mad cow disease.

Nonetheless, congressional negotiators continue to push Korea to accept U.S. beef without conditions. A staffer for Senator Max Baucus (D-Mont.), the chairman of the Senate Finance Committee, which oversees trade agreements, says the beef issue "very much affects congressional consideration" of the bill. Otherwise, the Korea deal has broad industry support, and no wonder: It would eliminate 95% of tariffs currently in place on U.S. goods within three years. Among the biggest backers are financial-services companies such as Citigroup (C) and insurance providers such as Ace Group (ACE). The agreement would allow U.S. companies to set up financial-services businesses in South Korea and open insurance offices that could compete on a level playing field with government-run insurers and Korean businesses.

Bill Rhodes, the senior vice-chairman of Citi and chairman of Citibank, called the deal "the best set of commitments negotiated by the U.S. so far in any [free-trade agreement] with regard to financial services."

Politics of Panama Trade

The Panama deal has received far less attention than the other two and the main sticking point appears to be less, well, sticky. After three years of negotiations with the U.S., the Panama talks hit an unusual glitch. Pedro Miguel González-Pinzón, who was elected last year to lead Panama's National Assembly, was indicted on first-degree murder charges in the U.S. He is accused of killing U.S. Army Sergeant Zak Hernández-Laporte and attempting to kill Sergeant Ronald Marshall, who survived, in 1992 the day before President George H.W. Bush arrived for a visit.

Hernández-Laporte and Marshall were riding in a Humvee that was attacked by gun-wielding assailants near the Panama Canal. It had been just three years since U.S. forces had invaded Panama to overthrow Manuel Noriega, and Hernández-Laporte's murder was considered by some to be part of a political protest. Although González-Pinzón was acquitted of the charges by a Panamanian jury, he is still wanted in the U.S. Key members of Congress have refused to sign off on the agreement as long as González-Pinzón remains in office. An Obama spokesman said the Democratic candidate would not support the trade agreement "until that situation is resolved." González-Pinzón told a newspaper in Panama he will not run for reelection this year, but his departure in late August could come too late for Congress to vote on the agreement during this session. Panamanian officials did not respond to requests for comment.

Opportunities in Panama

Although Panama's market is not as big as Korea's or Colombia's, it is growing rapidly and U.S. companies are opening offices there, preparing for business. Between 2006 and 2007, U.S. exports to Panama jumped 38% to more than $3.7 billion. Procter & Gamble (PG) decided about a year ago to open a regional hub in Panama City to develop product and pricing strategies for the region, and eventually plans to have about 250 people working there, says German Saenz, a spokesman for P&G in Latin America. The country's central location made it particularly appealing, Saenz says. "It's a good platform to access other countries, rather than a huge market" in itself, he says.

P&G is working with the Panamanian government to increase foreign investment. Businesses also see opportunities from Panama's decision two years ago to expand the Panama Canal. The expansion is expected to cost $5.25 billion and be completed in 2014. Heavy-duty equipment will be in high demand when construction on new locks for the canal starts next year; a release from Caterpillar gushed that, in Panama, "the land is crawling with Caterpillars."

That development, plus the pending departure of González-Pinzón, has the business community optimistic about passing a trade agreement in the U.S. Congress. As the Chamber's Murphy sees it, such a vote is "just a question of scheduling."

Salzman is an intern at BusinessWeek.