After almost 1,000 days of sitting on three job-creating Free Trade Agreements (FTAs) with Colombia, South Korea and Panama, President Obama finally submitted the FTAs to Congress on October 3rd.[1] Only two days after receiving the FTAs from the President, the House Ways and Means Committee passed all three with bipartisan majorities.[2] Less than a week later, the Senate Finance Committee also passed all three FTAs with bipartisan majorities,[3] and on October 12th, both the House and Senate are scheduled to vote on all three FTAs -- less than 10 days after presentation by the President.
Trade with our current FTA partners supports almost 18 million U.S. jobs.[4] When the U.S. enters into new trade agreements, exports to those countries have historically grown fourfold in the first five years.[5] With 80 percent of the world’s purchasing power outside the U.S.,[6] trade agreements are necessary for future U.S. growth. President Obama’s delay has cost Americans hundreds of thousands of good jobs during a time of economic hardship.[7]
Korea Free Trade Agreement
The Korea Agreement will increase U.S. exports by $10-11 billion per year.[8] In 2010, Korea was the fifth-largest market for U.S. agricultural goods. This FTA will eliminate most Korean tariffs and quota tariffs, and open many sectors to U.S. exports, including autos, which had limited market access traditionally.[9] Increased U.S. exports to Korea would vastly outweigh increased Korean imports.[10]
Colombia Free Trade Agreement
The Colombia Agreement will increase U.S. exports by more than $1.1 billion per year.[11] Currently, U.S. goods face an average 12.5 percent tariff going into Colombia; this FTA will eliminate the majority of those tariffs immediately and eventually remove 99 percent of the tariffs.[12] Historically, Colombia has been the largest U.S. agricultural market in Latin America; however, U.S. exports fell 50 percent between 2008 and 2010 as U.S. exporters waited for this FTA while other nations entered into agreements with Colombia.[13] The Colombia FTA will result in a $2.5 billion increase in the U.S. GDP.[14]
Panama Free Trade Agreement
The Panama Agreement will increase U.S. exports of grain to Panama by 61 percent, and exports of cars and light trucks by 43 percent.[15] This FTA will eliminate the majority of Panamanian tariffs on American products immediately and eventually remove 99 percent of the tariffs.[16] American agricultural exports to Panama will increase by 20-46 percent.[17]
These three trade agreements will provide American exporters the same benefits foreign competitors already possess. Korea and Colombia already have, or are negotiating, trade agreements with other nations, including the EU, Canada, and each other.[18] Failure to implement U.S. trade agreements could result in $40 billion worth of exports lost to our competitors.[19] We must act; on a level playing field, American can compete and win.
After fast action by Congress, we will be left with a lingering question: How many American jobs were lost in the nearly 1,000 days that the President played politics with the Free Trade Agreements?
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1 Statement from President Obama on the Submission of the Korea, Colombia, and Panama Trade Agreements, October 3, 2011, http://www.whitehouse.gov/the-press-office/2011/10/03/statement-president-obama-submission-korea-colombia-and-panama-trade-agr.
2 Camp Statement on Committee Approval of Free Trade Agreements, http://waysandmeans.house.gov/News/DocumentSingle.aspx?DocumentID=263129.
3 The Colombia FTA passed Committee 18-6 and both the Panama and Korea FTAs passed by voice vote, http://finance.senate.gov/hearings/hearing/?id=611b68e1-5056-a032-52e9-e785d6525dd1 beginning at 74:30.
4 “Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with FTA Partners,” by Laura M. Baughman and Joseph F. Francois, May 14, 2010, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/100514_ftajobs_full_0.pdf.
5 “Myths and Facts: Trade Agreements, Deficits, Jobs and Growth,” http://www.chamberpost.com/2011/05/myths-and-facts-trade-agreements-deficits-jobs-and-growth.
6 Letter from National Association of Manufacturers to the President’s Council of Advisors on Science and Technology, April 20, 2010, http://www.nam.org/~/media/D3A22734DDDB4249AA61E6AD1A7B78E6/PCASTfinal.pdf.
7 “Trade Action – or Inaction: The Cost for American Workers and Companies,” by Laura M. Baughman and Joseph F. Francois, September 15, 2009, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/uscc_trade_action_inaction_study.pdf.
8 “The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications,” CRS Report RL34330, October 4, 2011, http://www.crs.gov/Products/RL/PDF/RL34330.pdf.
9 “Agriculture in Pending U.S. Free Trade Agreements with South Korea, Colombia, and Panama” CRS Report R40622, October 6, 2011, http://www.crs.gov/Products/R/PDF/R40622.pdf.
10 “U.S.-Korea Free Trade Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3949, September 2007, http://www.usitc.gov/publications/docs/pubs/2104F/pub3949.pdf.
11 “Proposed U.S.-Colombia Free Trade Agreement: Background and Issues,” CRS Report RL34470, October 4, 2011, http://www.crs.gov/Products/RL/PDF/RL34470.pdf.
12 “U.S.-Colombia Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3896, December 2006, http://www.usitc.gov/publications/docs/pubs/2104F/pub3896.pdf.
13 “AFBF Advocates Passing FTAs at World Trade Month Event,” American Farm Bureau Federation, May 24, 2011, http://www.fb.org/index.php?action=newsroom.news&year=2011&file=nr0524.html.
14 “U.S.-Colombia Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3896, December 2006, http://www.usitc.gov/publications/docs/pubs/2104F/pub3896.pdf.
15 “The Proposed U.S.-Panama Free Trade Agreement” CRS Report RL32540, October 6, 2011, http://www.crs.gov/Products/RL/PDF/RL32540.pdf.
16 “U.S.-Panama Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects” USITC Publication 3948, September 2007, http://www.usitc.gov/publications/332/pub3948.pdf.
17 “Agriculture in Pending U.S. Free Trade Agreements with South Korea, Colombia, and Panama” CRS Report R40622, October 6, 2011, http://www.crs.gov/Products/R/PDF/R40622.pdf.
18 Information on Free Trade Agreements available at the World Trade Organization’s Regional Trade Agreements Information System, http://rtais.wto.org/UI/PublicMaintainRTAHome.aspx.
19 “Trade Action – or Inaction: The Cost for American Workers and Companies,” by Laura M. Baughman and Joseph F. Francois, September 15, 2009, U.S. Chamber of Commerce, http://www.uschamber.com/sites/default/files/reports/uscc_trade_action_inaction_study.pdf.
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