Congress Passes Free Trade Agreements
After a five-year impasse, Congress on Oct. 12 passed free trade agreements with Panama, Colombia and South Korea. The three bills received substantial bipartisan support and passed with majorities in both houses.
Collectively, the new free trade agreements are expected to broaden U.S. market access abroad by significantly reducing and in some cases eliminating tariffs on U.S. exports. The independent U.S. International Trade Commission has estimated the trade agreements will boost U.S. exports by approximately $13 billion and create at least 70,000 export-supported jobs here at home.
The free trade act with Panama is expected to serve U.S. businesses tremendously by allowing American businesses to compete for Panamanian government procurements, namely, the expansion of the Panama Canal.
A free trade act with Colombia not only will reduce export tariffs, but it also will give the U.S. the opportunity to develop U.S.-based services companies in the Colombian market. Services including telecommunications, transportation, banking and insurance, and information technology could prove to be tremendous investments for the U.S.
The South Korea Free Trade Agreement will mainly benefit the machinery, equipment and motor vehicle industries, which are projected to see export increases of $2.9 billion and $194 million respectively.
The full economic benefit of the three free trade agreements will not be achieved overnight. The agreements nevertheless will optimize trade revenue, provide manufacturers with new customers and encourage sustainable job growth in the United States. In an unsteady economic climate where politics have slowed legislation, these bills are an optimistic light at the end of the tunnel.