TRADE ACTION – OR INACTION: THE COST FOR AMERICAN WORKERS AND COMPANIES
September 17, 2009
The United States has completed negotiations of three free trade agreements (FTAs) that await Congressional approval of implementing legislation. The United States signed FTAs with Colombia on November 22, 2006, with Panama on June 28, 2007, and with Korea on June 30, 2007. Congress has not yet taken up any of these agreements.
Other major trading partners are also in the process of negotiating FTAs with Colombia and Korea:
- Canada completed negotiation of an FTA with Colombia and submitted it on March 26, 2009, for approval by the Canadian House of Commons.
- Canada completed negotiations of an FTA with Panama on August 11, 2009.
- The European Union (EU) and Korea concluded negotiations on July 14, 2009, for a comprehensive FTA that is expected to be signed in late 2009 and implemented in 2010.
- The European Union has held several negotiating rounds for a free trade agreement with Colombia that may also include Peru and Ecuador.
There are consequences, according to the U.S. Chamber of Commerce, to the failure of the United States to act on its FTAs. If the European Union and Canada implement their FTAs with Korea and Colombia and the United States does not:
- Exporters in the European Union and Canada will enjoy a competitive advantage over U.S. exporters in the Korean and Colombian markets.
- Some U.S. export sales to these markets will be lost to exporters in the European Union and Canada.
- The loss of export sales will have a negative impact on U.S. companies, national output and consequently U.S. jobs.
Specifically, says the Chamber, failure to implement the United States FTAs while our trading partners go forward with their FTAs would:
- Lead to a decline of $40.2 billion in U.S. exports of goods and services and U.S. national output failing to grow by $44.8 billion.
- Lead to an estimated total net negative impact on U.S. employment from the trade and output losses of 383,400.
Source: Laura M. Baughman and Joseph F. Francois, "Failure to Implement U.S.-Korea and U.S.-Colombia Free Trade Agreements," U.S. Chamber of Commerce, September 15, 2009
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