Last Friday, President Obama signed into law free trade agreements between the United States and South Korea, Colombia, and Panama, along with the Trade Adjustment Assistance Extension for American workers displaced by international trade. The three trade agreements, negotiated more than four years ago, offer enormous opportunities for American manufacturers, service providers, and farmers. Indeed, according to the Business Roundtable, passage of the three FTAs will create an estimated 250,000 new American jobs. The agreements also help keep the United States competitive in the global marketplace, and ensure that the United States will no longer be at a disadvantage relative to other countries that have already signed and implemented similar agreements.
The U.S.-Korea FTA, which is the most significant U.S. trade achievement since the North American Free Trade Agreement in 1994, eliminates within three years nearly 95 percent of existing tariffs and other barriers to bilateral trade in consumer and industrial products, providing U.S. manufacturers and service producers virtually unfettered access to the world’s 15th largest economy and its 51 million consumers. As a result, trade flows with South Korea – already America’s 7th largest trading partner – will expand by an estimated $20 billion each year, adding $10 to $12 billion annually to GDP, according to the International Trade Commission (ITC).
In negotiating the agreement, South Korea went far beyond its WTO obligations, permitting market access across virtually all service sectors. This is enormously important to the United States because services account for 80 percent of our nation’s GDP and an equivalent portion of the private sector workforce. For example, under the terms of the agreement American banks, securities firms, insurers, and asset managers may establish or acquire financial institutions in Korea, establish branches, and supply a wide range of products and services cross-border.
The ITC also estimates that the Colombia FTA will expand U.S. exports by more than $1.1 billion, while the Panama FTA will eliminate the majority of Panamanian tariffs on American products immediately, and eventually remove 99 percent of the tariffs.
Also commendable is the bipartisanship with which these trade deals were passed by Congress. With national unemployment stuck above 9 percent, the agreements promise to create jobs for American workers and opportunities for American businesses. We congratulate Congress and the Administration and encourage the exploration of similar trade agreements to keep America competitive and move us closer to meeting President Obama's goal of doubling U.S. exports by 2014.
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