During Obama’s first state of the union address, he announced his goal of doubling exports within the next five years. He claims that by doing this he is creating approximately 2 million jobs. Part of this strategy is the passage of the stalled agreements with Korea, Colombia, and Panama. While this is a commendable goal, pardon us if we seem a bit skeptical considering Obama’s track record on trade thus far. The list includes the protectionist “Buy American” provision in the stimulus bill, which has cost the U.S 200,000 jobs. Then the administration continued to impose barriers to trade by increasing important tariffs on poultry, tires, and steel.
The agreements with Korea, Colombia, and Panama, negotiated during the Bush administration, have remained stalled largely due to protectionists in Congress pandering to their anti-trade union allies., The result of this inaction is evident when in June 2010 imports increased, but U.S exports decreased by 1.3 percent.
An agreement with Korea will eliminate 95 percent of tariffs on all consumer and industrial goods within three years and within the decade remove the remaining. This will create a new market for U.S goods and will also be important in maintaining security on the Korean Peninsula.
Colombia can export to the US and be free of tariffs while the US tariffs go as high as 38 percent when exporting to Colombia. Obama needs to ratify the free-trade agreement so he can be on his way to achieving his goal, which he is a long way from. An agreement with Colombia will fortify an already establish relationship with the U.S. Once this Trade Agreement is enacted over 80 percent of U.S exports would enter duty-free and the remaining would be removed within a decade.
Over ninety percent of imports from Panama are duty free, but U.S products still face tariffs when entering Panama. An agreement with Panama will eliminate this barrier and open new markets for U.S products. Also, like Colombia, this will strengthen an already established relationship with the U.S and will show that the U.S supports countries who have embraced free markets and economic liberalization.
Trade accounts for more than 25 percent of our economic growth. The Free Trade agreements will stimulate the economy in the long and short-term. Obama has stated that he wants to double exports by 2015, but he has not done much to achieve his goal. It is time for Obama to change his way of doing things by getting out of the dug-out, stepping up to the plate, and swinging the bat.