Why the United States must sign three pending free trade agreements -- or risk losing its place in the global economy.
Emerging from the most severe economic downturn in a generation, the United States has a choice: Do we continue to be a global beacon for open markets and economic advancement? Or do we turn inward and abandon our leadership on trade policies, which has been a hallmark of economic growth since the end of World War II? The U.S. Congress will soon have an opportunity to make this choice when President Barack Obama seeks formal approval of our pending free trade agreements with Colombia, Panama, and South Korea.
The United States' unemployment rate has hovered between 8 and 10 percent for more than two years. Economic insecurity is being felt across the country, with home foreclosures at record highs. Our national debate is centered on the size and scope of federal power and how to confront record spending and debt. In such a context, many view international trade as an assault on American workers rather than the job creator it has historically proved to be.
But the cost of failing to approve these trade agreements is high. It would send a signal that the United States is abandoning the core principles of trade that have helped make it an exemplar of economic freedom and growth. At the same time, these agreements will strengthen America's international competitiveness and spur job creation here at home, without adding to the federal debt.
The opportunity to demonstrate our continued leadership on international trade is now. We need to work together to advance our long-stalled agreements with Colombia, Panama, and South Korea. We can no longer afford to sit on the sidelines. If we don't act now, we risk falling further behind other countries that are forging deals to expand opportunities for their farmers, workers, and job creators.
Our agreement with Colombia is a prime example. In 2008, the United States was the primary supplier of corn, wheat, and soybeans to Colombia, accounting for 71 percent of the market. Today, our market share has dropped to 27 percent. The reason is simple: While our trade pact, first signed in 2006, was collecting dust, other countries stepped in to fill our void.
According to the U.S. International Trade Commission (ITC), fully implementing the trade agreements with Colombia and Panama would expand U.S. exports by more than $1 billion a year. Moreover, since the tariffs of Colombia and Panama are significantly higher than those of the United States, these agreements would level the playing field for U.S. exporters. Today, almost all Colombian and Panamanian products enter the United States duty-free through preference programs. In contrast, U.S. products entering the Colombian market face high tariffs of up to 35 percent for industrial goods and up to 388 percent for agricultural products. In Panama, U.S. industrial products get hit with tariffs of up to 81 percent while U.S. agricultural products face tariffs as high as 260 percent. Once entered into force, our trade agreements will eliminate this tariff asymmetry and provide duty-free access for American-made products into Colombia and Panama. This means more jobs for American workers and business expansion for American employers.
The U.S.-Korea free trade agreement (KORUS), the largest agreement negotiated in over two decades, offers substantial new economic opportunities as well. The ITC estimates that the tariff cuts alone in KORUS will increase exports of American goods by $10 billion. It also includes the strongest intellectual property rights provisions in any U.S. free trade agreement negotiated to date.
But as with Colombia and Panama, we risk falling behind and losing out for American businesses and farmers. The United States used to be South Korea's biggest trading partner. We are now in fourth place -- behind China, Japan, and the European Union. Potential benefits for jobs and our economy are in jeopardy if we do nothing while South Korea moves forward on agreements with the European Union, Australia, Canada, and others, further leaving the United States behind.
There are, however, some signs that the United States may finally be ready to get back in the game and open markets for American businesses and workers in a meaningful way. Earlier this month, Barack Obama's administration announced a new Action Plan on labor issues between the United States and Colombia that should clear the path for advancing the Colombia agreement. The White House also appears poised to soon seek approval of the pact with Panama. And while there are some residual issues over U.S. beef, the agreement with Korea is likely to receive a vote as well.
We must now capitalize on this newfound momentum and advance all three agreements. Implementation of these three free trade agreements will yield new economic opportunities for Americans, strengthen our international alliances, and preserve the United States' role as the single greatest economy in the world and the leader of the global trading system.
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