America’s slow-growth economy can use all the help it can get. The president and Congress must lend a hand by creating conditions where businesses and agriculture can flourish.
The approval of free trade agreements with South Korea, Colombia and Panama would do just that for American farmers and manufacturers.
The treaties, negotiated during the Bush administration, have languished since President Barack Obama took office in January 2009. But after finally negotiating adjustments to his liking, the president submitted the treaties to Congress last week. Obama said the trade agreements would make it easier for American companies to do business in those three countries, and that the increased exports would support jobs here at home.
The agreements have the goal of reducing or eliminating tariffs charged by South Korea, Colombia and Panama that increase the prices of U.S. products in those countries, making them less competitive compared with products from other nations that already have trade accords.
Farmers should be happy with the agreements. With some tariffs being eliminated immediately and others gradually, U.S. agricultural exports should benefit. That will support farmers here in northern Illinois and elsewhere.
Bob Stallman, president of the American Farm Bureau Federation, reviewed the agreements and liked what he saw.
“Combined, the three FTAs represent nearly $2.5 billion in new agriculture exports and would create the economic growth that could generate support for up to 22,500 U.S. jobs. These gains will be realized only if the three agreements are passed by Congress and implemented,” Stallman said in a statement.
A case in point is Panama, where U.S. agricultural products face an annual tariff that averages 15 percent. Under the trade deal, tariffs on more than half of those products will be eliminated right away, with the rest phased out over 15 years.
Non-ag businesses also have a lot to like in the treaties. For example, Colombia charges tariffs ranging from 7.4 percent to 14.6 percent on items such as U.S. autos, auto parts, metals, ores, transportation equipment, building products, paper and consumer goods. After full implementation of the agreement, those tariffs will fall to zero.
South Korea has the largest economy of the three nations involved in the new free trade agreements. Obama said the agreement could support at least 70,000 U.S. jobs as annual exports of American goods to South Korea increase up to $11 billion a year.
That sounds good to us.
When the free trade agreements are brought to the floor, we urge our senators and House members to vote yes.