As the new Congress and the Obama administration get down to business, most Americans are looking for two things from Washington: jobs and bipartisanship.
There are no easy answers, but there is one thing that Congress and the administration can do quickly to boost job growth and demonstrate that bipartisan cooperation: Ratify the U.S.-Korea Free Trade Agreement. By giving U.S. companies greater access to one of Asia’s fast-growing markets, the agreement will generate jobs and economic growth across nearly every sector of the U.S. economy.
The U.S. International Trade Commission estimates that the trade pact would create more than 70,000 American jobs and increase U.S. exports by as much as $11 billion. Those estimates are conservative because they consider only the impact of reducing existing tariffs on U.S. exports. Eliminating procurement requirements and other legal restrictions that favor Korean companies — and effectively shut out U.S. firms — would create additional American jobs.
Ratifying the U.S.-Korea agreement is also vitally important to American strategic and economic interests in Asia. Fast-growing Asian economies are leading the way to a global economy recovery, but the United States is being left behind.
The European Union and other governments are working hard to increase their share of Asian trade, often at the expense of the U.S. When the new EU-Korea trade agreement takes effect on July 1, companies from EU nations will be able to sell products to South Korea tariff-free. Without a U.S.-Korea agreement, American companies will continue to be saddled with tariffs ranging from 6.6 percent to 49 percent.
At the same time, Asian nations are trading more freely with each other, making South Korea less reliant on U.S. imports to meet the country’s growing consumer demand. In 2003, the United States was South Korea’s biggest trading partner. We are now fourth, behind China, Japan and the European Union. Our share of South Korea’s import market has dropped from 21 percent to about nine percent.
It’s a worrisome trend, given the direct link between exports and jobs. By some estimates, every one percent increase in U.S. exports generates about 250,000 American jobs. Quite simply, it would be shortsighted to not lower trade barriers to more of our products and services, thereby creating more jobs. South Korea is America’s seventh largest trading partner, with U.S. exports ranging from cars to corn, from footwear to fish. According to the National Association of Manufacturers, the export of goods to South Korea currently supports more than 200,000 U.S. jobs.
The sale of U.S. communications and information technology accounts for nearly $10 billion in exports to South Korea annually. But to complete those sales, U.S. companies paid about $380 million in duties. The trade agreement would eliminate tariffs for nearly all information technology and communications exports. It would also ensure better protections for intellectual property, and establish a legal framework and transparency for new investments.
Technology and innovation are the twin pillars of a global economic rebound. Breaking down barriers that inhibit the spread of technology makes businesses more productive, encourages economic growth and improves daily life for people across the planet. And because the United States leads the world in information technology, it has the most to gain.
President Obama has pledged to submit the U.S.-Korea Trade Agreement to Congress early this year. When he does, Congress should approve it quickly. The administration and Congress should also complete work as quickly as possible on similar pending agreements with Colombia and Panama.
While those trade agreements would not have as large an economic impact as the U.S.-Korea pact, they would generate trade and American jobs. They also would contribute to stability and economic growth for our allies in Latin America.
Of course, there are many other ways to support an effective growth-and-jobs agenda built on trade, innovation and global engagement.
For America’s long-term financial security, we need to improve our education system, especially in math, science and technology. We need a tax code that encourages innovation and ensures that U.S. companies remain globally competitive. We need to put entitlement spending on a more sustainable path.
But if the 112th Congress and the Obama administration want to do something quickly to show that they can work together to create jobs, there is an easy solution — ratify the free trade agreements for South Korea, Colombia and Panama.
Source: http://thehill.com
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