Pro: Korean trade pact is a welcome shot in the arm for U.S. economy
A funny thing happened in the wake of the midterm elections: Washington entered into an era of bipartisanship, and trade is the unlikely topic of agreement.
From the U.S. Chamber of Commerce to the United Auto Workers, President Obama’s announcement that he’ll send the Korea-U.S. Free Trade Agreement (KORUS) to Congress early this year has been applauded. Trade leaders from both parties have pledged support, and the new Congress should act swiftly to ratify this pact.
We must seize this opportunity. Now is the time to advance an aggressive trade and global engagement agenda that will create jobs, revitalize the economy, and reassert America’s leadership. Such an agenda offers an excellent opportunity to advance the goal of doubling U.S. exports in five years and putting Americans back to work.
It starts with ensuring congressional passage of KORUS by next summer. Working together, the Chamber of Commerce and the administration have vowed to build public support for this vital agreement that will help American companies sell their goods and services to the world’s 12th-largest economy.
KORUS will boost GDP by at least $12 billion through expanded exports and create more than 70,000 American jobs.
Successful implementation of KORUS will not only create jobs but will save jobs. A Chamber of Commerce study found that failure to enact KORUS would cost more than 340,000 American jobs and cut $35 billion in exports. Those jobs would be lost because the European Union and others would gain a competitive advantage over America in Korea as their free trade agreements (FTAs) go into effect soon.
KORUS will help the United States gain an important strategic foothold in Asia, one of the fastest-growing regions worldwide.
Currently, the United States is at risk of being shut out of this market as the number of FTAs in Asia has exploded. There are more than 175 agreements in force, 20 awaiting implementation, and 50 under negotiation. By contrast, the United States has entered into exactly two FTAs with Pacific countries—Singapore and Australia.
While we’re trying to create jobs by exporting more American goods and services, our share of Asia’s international trade is actually declining. Many U.S. manufacturers and farmers are being displaced by local competitors based in the European Union or Australia, which are forging deals across the region.
That’s why we’re pleased the Obama administration has expressed strong support for swift completion of a Trans-Pacific Partnership agreement, which would ensure that America has access to this rapidly growing market and a level playing field on which to compete.
Congressional Republican leaders have promised to approve not just KORUS but two other pending FTAs—with Colombia and Panama.
While more than 90 percent of imports from these countries enter America duty free, most U.S.-manufactured goods face import taxes in the double digits when they enter Colombia and Panama. Our farm products face even steeper barriers. These agreements will end this unfair status quo for American workers, farmers and companies. We urge Congress to approve all three pending FTAs swiftly.
Finally, we must revitalize the moribund Doha Round of global trade negotiations. A worldwide reduction in tariffs and trade barriers would provide a worldwide “stimulus,” creating jobs, opportunities and higher standards of living around the globe, especially in poor countries.
With nearly one in five Americans either out of work or underemployed, we must grab the momentum created by KORUS and act on additional trade agreements. These pacts offer lawmakers a chance to set aside ideology, work across party lines, and advance policies that will create jobs and grow the economy.
If America is to restore its economic greatness, the White House and the business community must act in good faith as partners. Trade is an area we can work together and get something done for the American people.
Thomas J. Donohue is the president and CEO of the U.S. Chamber of Commerce. Readers may write him at U.S. Chamber of Commerce, 1615 H Street NW, Washington, D.C. 20062; website: www.uschamber.com.