The House Republicans unveiled their jobs agenda today and beyond the expected calls for overhauling Medicare and lowering taxes, the proposal also focuses on the need to pass the pending trade agreements with Colombia, South Korea, and Panama. These agreements are long overdue and as the proposal highlights will lead to the creation of 250,000 jobs.
For months now, the Obama administration has touted the importance of the FTA’s to job creation and has promised action on all three agreements. But last week, the Administration took a step back and announced that any FTA must be coupled with unemployment assistance or what is known as Trade Adjustment Assistance. Last February, legislation to extend an expanded version of TAA that was included in the 2009 stimulus plan stalled due to Republican opposition to the cost of extension. (Pre-stimulus TAA, which continues to cost over $1 billion annually, remains in place.)
Over the last few years, millions of jobs have disappeared and in the never-ending search for whom to blame, foreign competition tends to be the scapegoat. Job creation and job loss is an endless cycle. Just as some have lost their job due to new technological competition, so too does job loss occur when there is increased competition through foreign trade. Yet, as James Sherk, Senior Policy Analyst at the Heritage Foundation points out in a policy brief, the number of unemployed due to import competition is relatively small—just one percent of all jobs lost in mass layoffs—while the cost of assisting this category of unemployed is staggering—estimated at $2.4 billion in 2011. Moreover, unemployment assistance already exists outside a special designation for trade, so this program is nothing more than duplicative spending.
While holding the agreements hostage may secure some Democrat votes, this tactic could lead to a loss in support from Republicans still concerned about additional spending measures. When passed, the three trade deals will yield a $13 billion increase in economic revenue for U.S. businesses, as well as the hundreds of thousands of jobs highlighted above. If President Obama were serious about economic growth, he would stop pandering to his union allies and submit the trade agreements to Congress, with or without TAA.