FAILURE TO IMPLEMENT THE U.S.-KOREA FREE TRADE AGREEMENT: THE COST FOR AMERICAN WORKERS AND COMPANIES
November 9, 2009
Congress and the Obama Administration have yet to consider legislation to implement the U.S.-Korea Free Trade Agreement (FTA), which was signed by representatives of the two governments on June 30, 2007. While more than two years have passed since the agreement was signed, it is unclear when the agreement will be implemented, says the U.S. Chamber of Commerce.
In the meantime, other major trading nations are also seeking trade agreements with Korea, says the Chamber:
- 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.
- Separately, the Canadian government describes its negotiations with Korea for an FTA as "well advanced."
The U.S.-Korea FTA would support job-creating trade -- both exports and imports -- in the United States, says the Chamber:
- If the EU and Canada implement their trade agreements with Korea and the United States does not, exporters in the EU and Canada will enjoy a competitive advantage over U.S. exporters in the Korean market.
- Some U.S. export sales will be lost to exporters in the EU and Canada and the loss of export sales will have a negative impact on U.S. companies, national output and consequently U.S. jobs.
Failure by the United States to implement its trade agreement with Korea will cost related exports, output and jobs, explains the Chamber:
- Specifically, failure to implement the U.S.-Korea FTA while our trading partners go forward with their FTAs with Korea would lead to a decline of $35.1 billion in U.S. exports of goods and services to the world and U.S. national output failing to grow by $40.4 billion.
- The Chamber estimates that the total net negative impact on U.S. employment from these trade and output losses would total 345,017 jobs.
Source: Laura M. Baughman and Joseph F. Francois, "Failure to Implement the U.S.-Korea Free Trade Agreement: The Cost for American Workers and Companies," U.S. Chamber of Commerce, November 6, 2009.
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