Wednesday, October 12, 2011

South Korean FTA Is A Job Killer

Today, three trade agreements are schedule to come up for a vote in the House of Representatives that governing trade with Columbia, Panama and South Korea. These bills were orginially part of Pres. Obama's "American Jobs Act". However, Majority Leader Cantor, in an effort to work with the President felt that these trade agreements were actually good parts of Obama's job bill and could pass as stand alone bills.

It has recently came to my attention that the Korean-U.S. Trade Agreement (a.k.a. KORUS) could result in significant job loss in the U.S. Here is why, the Economic Policy Institute reported:

Advocates of free trade agreements, including the U.S. Chamber of Commerce, rely on deeply flawed projections for estimating the jobs impact of signing new free trade agreements (FTAs). As a result, these projections generally show that signing new FTAs will create jobs in the United States, when in fact doing so may destroy or displace jobs.

This Economic Policy Institute analysis examines the likely jobs impact of signing pending FTAs with Korea and Colombia. It shows, based on past experience, that these trade agreements will increase the U.S.’s trade deficit with both countries. Contrary to the Chamber’s projections, the EPI analysis then shows that the increased trade deficit per se will correspond to the loss of 214,000 jobs in the U.S. by 2015.

If that is not enough for you, another red flag is that President Obama made the promise, according to ApparelNew.Net. that he would not introduce a bill that did not have job training funding.

Obama repeatedly said he would not introduce the three lingering free-trade agreements for congressional approval until money was found for the job-training program, which expired in February. The Senate passed the job-training amendment after it was attached to a bill to renew the General System of Preferences program. The bill and its amendment passed on a 70–27 bipartisan vote.

Usually people need job training when they don't have a job. Now back the the Economic Policy Institute, according to them:

U.S. International Trade Commission (USITC) projects this will have a small positive impact on the U.S. trade balance, and “minimal or negligible “ impact on U.S. employment,  history  shows that such trade deals lead to rapidly growing trade deficits and job loss in the United States.

The Charts below compare USITC’s estimates of the impact of the forthcoming free trade agreement with Korea to EPI’s own calculation. Unlike USITC’s forecast of a small positive impact, EPI’s research shows it will increase the U.S. trade deficit with Korea by about $16.7 billion, and displace about 159,000 American jobs within the first seven years after it takes effect.

The USITC has a history of vastly underestimating the negative impacts that free trade agreements have on the U.S. economy. In 1999, it estimated that China’s entry into the World Trade Organization would increase the U.S. trade deficit with China by only $1.0 billion, and have no significant impact on U.S. employment.  In fact, the U.S. trade deficit with China increased by $185 billion between 2001 (when China entered the WTO) and 2008, and 2.4 million U.S. jobs have been displaced or lost. The U.S. trade deficit with Mexico also rose rapidly after the North American Free Trade Agreement (NAFTA) took effect in 1994.

These free trade agreements have been taken up by the Republican's in a effort to cooperate with the Obama Administration on a bi-partisan legislation. However, what ever the reason, if you disagree with the free trade agreement, please contact congress at 202-224-3121 let them VOTE NO on KORUS.

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