Free Trade Agreements Long Overdue

The failure of the Obama stimulus bill to keep unemployment below 9 percent demonstrates that the government is not effective at creating jobs. What the government can do is remove barriers to economic growth and create conditions favorable for employment. The long-delayed trade agreements with South Korea, Colombia and Panama will do just that. And, unlike the $787 billion stimulus, they will not cost taxpayers a dime.

Outdated tariff policies with these three countries have created an unlevel playing field, and this imbalance is costing America both jobs and revenue. For instance, U.S. exports to Panama face a tariff as high as 90 percent, while the average tariff imposed on Panamanian exports to the United States is less than 0.1 percent. The trade imbalance with Colombia is less drastic but still unfair -- with American exports facing an 11 percent tax, compared to a tariff of less than one percent for goods imported from Colombia. The agreement to force South Korea to open new markets up to U.S. goods and services and eliminate steep tariffs could lead to more than a $10 billion increase in exports.

There is a direct relationship between trade policy and jobs. Exports directly accounted for 8.5 million U.S. jobs in 2009. Unfortunately, that is roughly the same number of export-related jobs we had in 1999. This is a clear indication that U.S. trade policy must be improved -- especially during this time of recession and persistent unemployment. The trade agreements with South Korea, Colombia and Panama will create an estimated 250,000 U.S. jobs and add over $10 billion to our Gross Domestic Product.

These vital trade pacts were originally negotiated by the Bush administration and have been pending for five years. However, the Obama administration has resisted sending them to Congress for approval until now. The White House refused to allow consideration of the trade deals unless Congress first agreed to pass an extension of Trade Adjustment Assistance (TAA). This program provides assistance to U.S. workers displaced by foreign trade. While TAA may be a worthwhile program, it is exceedingly counterproductive to delay ratification of agreements that could help those very workers by creating tens of thousands of new jobs. During the years these commonsense measures have languished in Washington gridlock, our competitors in Europe and Canada have reaped the rewards. Jobs and contracts that could have benefited American farmers, ranchers, workers and businesses have gone to other nations.

These free trade agreements are finally on their way to implementation. Their passage is significant not only for the jobs they will create but also for the example they provide of bipartisan, commonsense solutions that will create jobs at no cost to taxpayers. President Obama would do well to drop his tax hike plans in favor of real job creation policies like these.