Congress resoundingly approved long-stalled trade agreements with South Korea, Colombia and Panama late Wednesday, authorizing the most significant expansion of trade relations in nearly two decades.
While the deals with Colombia and Panama are likely to have limited economic impact, the agreement with South Korea is designed to break down barriers between the United States and the world’s 15th-largest economy.
About 6,000 farmers gathered in Seoul last week to protest against the South Korea-US Free Trade Agreement, which is currently awaiting ratification by the South Korean and the U.S. lawmakers. (Oct. 6)
Oct. 11 (Bloomberg) -- Alan Keir, HSBC Holdings Plc's global head of commercial banking, talks about the bank's quarterly report on global trade volumes. He speaks with Maryam Nemazee on Bloomberg Television's "The Pulse."
The South Korea deal has the potential to create as many as 280,000 American jobs, according to a recent assessment by the staff of the U.S. International Trade Commission, and to boost exports by more than $12 billion. Several major labor unions have warned that any gains will come at the cost of layoffs among American workers because of heightened competition from South Korean imports.
The South Korea deal is widely hailed as the most consequential trade pact since the North American Free Trade Agreement was ratified in 1994.
The House approved all three deals and was quickly followed by the Senate. Final approval of the agreements represents a victory for the Obama administration and congressional leaders in both parties, who have touted the trade pacts as a means to jump-start the flagging economy without additional government spending. Ratification of the agreements holds particular importance for President Obama, who has set a goal of doubling U.S. exports by 2015 and is facing a tough bid for reelection with unemployment stuck at 9.1 percent.
“I look forward to signing these agreements,” Obama said late Wednesday. He hailed passage as “a major win for American workers and businesses.”
“Tonight’s vote, with bipartisan support, will significantly boost exports that bear the proud label ‘Made in America,’ support tens of thousands of good-paying American jobs and protect labor rights, the environment and intellectual property,” Obama said.
A variety of U.S. industries are expected to benefit from the agreements. Producers of beef, dairy, pork and poultry products, chemicals, and plastics are all likely to increase exports to Korea. The banking and financial services industries could also be big winners, analysts said, benefiting from relaxed regulations and rules relating to foreign investment.
“These free-trade agreements will give our economy a much-needed shot in the arm and create tens of thousands of American jobs,” said Sen. Max Baucus (D-Mont.). “The passage of these agreements today is a significant victory for American workers and businesses, and will help create jobs here at home.”
Several Democrats and prominent labor unions, however, oppose the deals, arguing that they could help U.S. companies without bringing much benefit to U.S. workers, particularly if increased imports lead to widespread layoffs. Some also argue that the agreements serve to reward two countries, Panama and Colombia, that have been hostile to organized labor and international environmental standards.
“The truth is, I think this is going to cost us jobs,” said Clyde Prestowitz, a Reagan administration Commerce Department official who founded the nonpartisan Economic Strategy Institute. Prestowitz noted that South Korea is a major exporter of textiles, steel, machined parts and semiconductors, among other goods.
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