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May 04, 2011

Obama Administration Begins Process for Passing Three Free Trade Deals

Posted in: Uncategorized

The White House will move forward on a trade agenda that could ramp up quickly. The South Korea, Panama and Colombia free trade deals could all come up for a vote later this year.

The administration is expected to send congressional leaders a letter as soon as Wednesday saying it is ready to begin preliminary discussions on passing a free trade agreement with Colombia, setting that pact on a legislative track.

A potential roadblock in passing the South Korea pact is the demand by Sen. Max Baucus (D., Mont.), chairman of the Senate Finance Committee, for some further accommodation on allowing U.S. beef from older cattle into South Korea. Some officials reported progress on this matter, but it was unclear if that was the case.

At the same time, the White House has made progress with House Republicans toward renewing the Trade Adjustment Assistance program for workers who are displaced as a result of trade agreements, a senior administration official said Tuesday.

Trade Adjustment Assistance expired back in February. You could see this as the carrot that gets some Democrats and union leaders back on these trade deals.

The White House did set the Colombia deal in motion today, through a letter from Ron Kirk, the US trade representative. Speaker of the House John Boehner lauded the announcement.

It’s not clear why workers should herald another set of NAFTA-style trade deals, given prior history:

To date, 682,900 U.S. jobs have been lost or displaced since the North American Free Trade Agreement (NAFTA) took effect in 1994, a new Economic Policy Institute (EPI) study finds. The main reason for the job loss is a $97.2 billion trade deficit with Mexico. In 1993, one year before NAFTA was implemented, the United States had a $1.6 billion trade surplus with Mexico that supported nearly 30,000 U.S. jobs.

All 50 states, the District of Columbia and Puerto Rico have seen jobs lost or displaced to Mexico in the past 17 years, says Robert Scott, EPI’s senior international economist and author of “Heading South: U.S.-Mexico trade and job displacement after NAFTA.”

These three deals are smaller, but according to EPI they would have an impact. They estimate that the South Korea deal could cost 159,000 jobs in the first eight years, and the Colombia deal 60,000 jobs.

The point of these free trade deals is supposed to be the ability to open markets and increase US jobs. But they frequently only create that giant sucking sound. It looks like that’s the agenda in Washington.


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