President Obama and congressional Democrats could give the economy a big boost if they wanted to. Trade agreements with South Korea, Colombia and Panama are being held hostage by the administration’s insistence that a vote on the deals be tied to a “retraining” program that is little more than an expensive giveaway to the unions.
Treaties signed years ago sit unratified. American companies are losing out on billions of dollars of export opportunities that are being diverted to firms in Europe and elsewhere, further excluding the United States from the global market.
As our eighth-largest trading partner, South Korea represents the most important market among the three pending pacts. Implementing the agreement would boost our gross domestic product (GDP) an estimated $10 billion to $12 billion. While the Democrats wasted time pandering to Big Labor, the European Union inked a free-trade deal that took effect July 1. That means items made in London or Brussels can enter South Korea without paying a tariff, but corn from Iowa and beef from Montana would be hit with a 49 percent levy. Nobody will bother buying American goods when they are that much more expensive.
The Colombian and Panamanian deals are much smaller, but hardly trivial considering how much help the economy needs right now. All trade agreements with Colombia have expired, including the Andean Trade Preferences Act. Ratifying a free-trade deal with Colombia would add about $2.5 billion to the U.S. GDP, largely through the elimination of tariffs (some of which are around 70 percent) on U.S. agricultural exports. As with South Korea, the Europeans have beaten us already with the implementation of a trade pact earlier this month. That means American businesses will find themselves at a competitive disadvantage. Our deal with Panama would result in American agricultural exports facing substantially lower trade barriers and would increase the access of American firms to Panama’s rapidly growing services sector.
There’s no legitimate reason to deny U.S. companies the same access to these markets that European firms now have. Each lost American sale represents a lost opportunity for expansion and the hiring of new employees. The longer these treaties are left sitting, the more jobs are lost. The only holdup is Mr. Obama’s insistence not only the that the three FTAs be considered in a bundle, but that the bundle include the $2.1 billion Trade Adjustment Assistance (TAA) payoff demanded by labor bosses.
The current version of the TAA probably would pass if considered separately, so there is little justification for including it in the vote on the trade deals, which are governed by fast-track authority and provide for a straight up or down vote. The interests of unions should not be put ahead of the interests of employees. In a world increasingly governed by regional trading agreements (there hasn’t been a new global agreement since 1995), we cannot afford to be left behind. This is just another example of how this reckless administration is sabotaging American prosperity.
Nita Ghei is a contributing Opinion writer for The Washington Times.