Congress Passes 3 New Trade Agreements
Congress recently passed three trade agreements that were sitting on a shelf because the Obama administration had previously indicated they would not sign them. The deals were approved with Columbia, Panama and South Korea. The president’s change of heart can most likely be attributed to the ongoing general malaise in the economy and the continued disappointing jobs figures.
These trade deals are estimated to add over 100,000 jobs to the US workforce. The largest deal is with South Korea, which accounts for 70,000 of the new jobs. This South Korea deal is the largest trade deal since the NAFTA deal.
These agreements would lower or eliminate tariffs that US exporters face when exporting to these countries. Many of the hurdles that these trade agreements faced related to big labor. Labor unions tend to be against most trade agreements because they complain that it sends high paying jobs overseas. In particular, the US auto industry was concerned about barriers to entry for US auto sales in Korea. Some concessions were made to help stifle those complaints.
Some GM parts are built in South Korea. Labor unions still assert that this deal will cost US jobs, but overall, industry experts believe it to be a net plus for the US job market. They contend that under the current system, for every 52 South Korean automobiles sold in the US, there is only one US manufactured car sold in Korea. This deal should lift trade barriers enough to change that.
What do you think? Are trade deals like these good for the US labor market?