Congress turns to trade this week, with two hearings on pending free trade agreements (FTAs). Discussion about the benefits of trade is always welcome, but the time for talk has passed. It is time for President Obama to send Congress the Colombia, Panama and South Korea FTAs for swift approval.
The longer the United States waits, the more market share U.S. manufacturers will lose to overseas competitors. The pending trade agreements enhance our ability to compete by removing tariff barriers and dismantling regulatory and non-tariff barriers that prevent our companies from fully realizing their export potential.
The agreements present great opportunities to U.S. manufacturers, which currently export more than $48 billion annually to Colombia, Panama and South Korea. Those that export goods to those countries will see higher profit margins and new markets opened to them. The International Trade Commission (ITC) estimates our export growth arising from this agreement will be strong, immediate, and lasting: an additional $12 billion annually in exports will result from approval of the three agreements. The effects will ripple through our economy, creating 100,000 new jobs, according to the ITC.
Or the U.S. can continue to delay and remain on the sidelines as we have since 2007. Our competitors have raced ahead, signing dozens of trade agreements that give their manufacturers a huge competitive edge over U.S. manufacturers. The EU-Korea and Canada-Colombia agreements, for example, take effect on July 1. This means that our competitors will begin to enjoy preferential access and duty-free treatment of their products, while U.S. exports will face tariffs that price our goods far above theirs. This disparity can have a significant impact on our economy. The U.S. accumulated a manufactured goods trade surplus with our existing trade agreement partners of nearly $70 billion over the past three years — while over that same period of time we had a manufactured goods deficit of more than $1 trillion with countries with which we don’t have trade agreements.
Given the unprecedented bipartisan agreement on the importance of exports and jobs, manufacturers are confident that the president and Congress will move forward on these agreements to level the playing field. In fact, manufacturers are participating in the Senate Finance Committee hearings this week to make the case on behalf of their employees and consumers. Two-thirds of our country’s total exports of goods and services are manufactured goods, and manufacturers are ready to expand into global markets.
The pending trade agreements with Colombia, Panama and South Korea offer our elected officials a choice — support economic expansion and job growth or retreat from the world economy and watch U.S. manufacturing stagnate as our foreign competitors thrive. U.S. manufacturers are eager to remove the burdens on trade and grow their businesses.
Jay Timmons is the president and CEO of the National Association of Manufacturers.