Issue Brief: Free Trade Agreements
Background: Opening and expanding markets through free trade policies have created economic dynamism that engenders continual innovation and leads to better products, new markets, and greater investment. Simply put, America stands to gain from free trade.
In 2010, President Obama set a goal: “double our exports” by 2014. Doubling our exports, which would create good Americans jobs, requires opening new markets through free trade agreements (FTAs). Unfortunately, President Obama has yet to submit the already negotiated trade agreements with South Korea, Panama and Colombia to Congress for approval. The three agreements increase exports and create upwards of tens, even hundreds of thousands of jobs.
Status: President Obama is holding the FTAs hostage, insisting Congress extend and increase funding for Trade Adjustment Assistance (TAA) programs. Congress cannot act on the job-creating agreements until the President submits them for approval. Conservatives in the House circulated a letter urging a clean vote on the FTAs, and an end to the TAA programs.
Bring the Heat: Heritage Action supports the FTAs, but not a continuation of the TAA programs. By linking the two together, President Obama is holding job creation hostage.
● Korea-U.S. FTA. If approved, it would be America’s largest free trade agreement in Asia, increasing U.S. exports by an estimated $10 billion annually and U.S. gross domestic product (GDP) by $11 billion. It would also create 70,000 U.S. jobs.
● U.S.-Colombia FTA. American companies have paid over $3.5 billion in unnecessary duties to the Colombian treasury because the agreement remains stalled.
● U.S.-Panama FTA. U.S. companies lost out on preferential treatment to bid on the largest public works project currently happening in Latin America because the agreement remains stalled.
● TAA Failed. According to The Heritage Foundation, the programs are both costly and ineffective. The generous benefits apply to about 1% and cost nearly $2 billion. Yet, numerous impact evaluations indicate that TAA programs are ineffective in raising the wages of participants.
● TAA Expiring. TAA is set to expire on February 12, 2012. Job-creating FTAs should not be held hostage to extend a costly, failed program that should be allowed to expire.
Take Action Now: Conservatives in Congress are urging a clean vote on the FTAs, and they need your support. Urge your Representative and Senators to demand that President Obama submit the three Free Trade Agreements for a vote without coupling them with the ineffective and expensive Trade Adjustment Assistance program.