The Obama administration is playing to the old popular-but-false notion that free trade robs Americans of jobs. Because of that, three important free-trade agreements — with South Korea, Colombia and Panama — are in jeopardy.
The president is insisting that these pacts, which would generate an estimated $13 billion more in sales by U.S. companies, be held hostage to renewal of the Trade Adjustment Assistance program, which was started nearly 50 years ago to help workers who have been displaced by foreign competition. In Obama' 2009 stimulus package, that assistance program was expanded to cover not only workers, but others indirectly affected by displacements. The cost of this program is estimated at between $800 million and $1.1 billion.
As distasteful as it may be, this is one on which Republicans ought to give in. The reason is simple. The cost of the assistance program would be more than offset by the increase in business and jobs created through the free-trade agreements.
Free trade is one of the best job-creation tools that exist. It opens new markets to American manufacturers and lowers the prices of items for American consumers. It is certainly much more efficient than any government relief program.
Meanwhile, South Korea, the largest of the three partners, is nearing completion of a free-trade pact with the European Union, which could take advantage of U.S. reluctance to undercut U.S. exporters. The time for dithering in the Senate is through.
Former Colombian president Alvaro Uribe Velez will be in Salt Lake City today to speak at a business and trade conference hosted by Zions Bank. He understands well the importance of free trade to his region. Under his leadership, foreign investment in Colombia grew by 50 percent, far more than in other Latin American countries. Colombia has become an attractive investment and the lives of ordinary Colombians have begun to improve dramatically as a result.
As Venezuela has sought to spread its leftward influence through the region, Colombia has been a strong U.S. ally and a shining hope for freedom in the region. This is in spite of the nation's obvious problems with drug traffickers and violence against labor organizers. Because of U.S. reluctance to ratify its trade agreement with Colombia, it, too, has sought agreements with the European Union and other nations. The United States, meanwhile, is in fear of losing credibility as an ally that doesn't follow through on its agreements.
What about American jobs? Significantly, Colombian products already are duty-free when they enter the United States. The proposed trade deal would remove Colombian tariffs from most American exports. In other words, the U.S. economy already is losing out on a one-way deal that truly does benefit only Colombian workers. By ratifying the deal, the Senate would open Colombia to more U.S. manufacturers.
If the president wants to play games with this kind of job-expanding agreement by tying it to an assistance program, that is short-sighted and dangerous. But the price of what he is asking is so little compared to the benefits of trade that Republicans ought to hold their noses and give in.