Senate Republicans last week refused to consider enacting free-trade agreements with Colombia, Panama and South Korea despite their previous criticism of President Barack Obama who failed to advance these treaties during his past two years in office. The reason? Democrats coupled their support for the trade deals with the inclusion of funding for additional unemployment benefits for workers that might lose their jobs as a result of freer trade.
The trade agreement with Colombia was signed in 2006 while the South Korea and Panama accords were signed a year later. Both must pass Congress before they can take effect but Democrats have protracted ratification while the Obama Administration went back to the Koreans to negotiate a better deal for American automakers.
The three trade agreements are expected to boost exports by up to $13 billion and should create or support tens of thousands of jobs in the United States. Yet Democrats insisted on expanding the Trade Adjustment Assistance program which finances income insurance and health benefits for employees who are negatively affected by the lifting of restrictions on imports and exports. Republicans refused to play ball. “We made it clear time and time again that we would not stomach attaching a program as big as this onto these agreements,” said Orrin Hatch, the top Republican on the Senate Finance Committee, last Thursday.
The administration tried to capitalize on the opposition’s defiance nonetheless. In a statement, Trade Representative Ron Kirk said that “the agreements were there — and Senate Finance Committee Republicans were not. Americans need their leaders at work,” he added, “in their seats, eyes on the ball, pushing every day to enact policies that create jobs here at home, advance this country’s economic recovery and help our working families.”
The best way to accomplish that would be to enact the free-trade agreements as soon as possible. The United States Chamber of Commerce, a business lobbying group, has forecast that the country would lose jobs and $40 billion worth in exports if the pending agreements suffer further delays.
If Democrats are so adamant about them, why did they wait four to five years to even bring them up for a vote while placating their union backers with renegotiations and delays? Why did they insist on attaching subsidies to ratification, knowing full well that Republicans would block the effort?
They were right to do so. “Trade Adjustment Assistance” defeats the very purpose of freer trade which is to enhance competition on a global scale.
Failure to enact the free-trade deals doesn’t just hurt the United States economically; it is a strategic blunder for the Obama Administration. Relations with Colombia have already been affected which undermines American influence in Central and South America while a longtime ally and economic partner as Korea does not deserve to be left in the cold by a government that is obsessed about creating “American jobs” but doesn’t seem to quite appreciate how trade is a win-win for both countries.