Trade pacts touted as job creators for America
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U.S. Trade Representative Ron Kirk said Wednesday that free trade pacts President Barack Obama recently signed with South Korea, Panama and Colombia are part of the White House's strategy to preserve and increase jobs through trade.
The agreements are designed to give U.S. companies greater access to the three countries and protect the rights of workers in those countries as well as the intellectual property of U.S. exporters. Mr. Kirk said in a telephone interview that the treaties eventually will add $12 billion to the economy. The South Korean pact is expected to create 70,000 U.S. jobs, he said.
Mr. Kirk said the pacts can help alleviate the chronic U.S. trade deficit, which was $419 billion through September, up 10 percent from a year ago. The combined U.S. trade deficit with South Korea, Panama and Colombia was $10 billion through September versus an $8 billion deficit last year. South Korea accounted for nearly all of this year's deficit.
There is persistent resistance to the trade agreements among some businesses and labor leaders. They say the pacts encourage U.S. businesses to move manufacturing overseas.
Those objections were raised last month by some business leaders who attended a meeting of Mr. Obama's jobs council at Seegrid, a Findlay company that makes robot-guided vehicles used in warehouses. The critics included AFL-CIO President Richard Trumka, a jobs council member who predicted the South Korean pact will cost 159,000 U.S. jobs.
Mr. Kirk said the Obama administration resisted pressure from some businesses to quickly approve the trade agreements, which had been negotiated by the Bush administration. White House officials used that time to overcome objections from groups such as U.S. auto producers and their labor unions. He said the result is great access to the Korean car market.
"We didn't get everything they wanted, but probably 90 percent," Mr. Kirk said.
Economist Ernest H. Preeg agreed the pacts open up foreign markets for U.S. companies. But they will not significantly improve the trade deficit, Mr. Preeg said, who works for Manufacturers Alliance/MAPI, which advises U.S. manufacturers.
He said the trade agreements do not address currency manipulation by China and other countries that give their exporters an unfair advantage by keeping the values of their currencies artificially low compared to the U.S. dollar.
Mr. Kirk acknowledged the trade deficit can increase when the economy improves because Americans have more to spend on imports.
That's one of the few things that Alan Tonelson, of the U.S. Business and Industry Council, can agree on with Mr. Kirk. The group represents about 2,000 small and medium-size manufacturers.
Mr. Tonelson said the trade deficit has increased since the recession ended in mid-2009, curbing U.S. economic growth, "and, it stands to reason, subtracting from employment." As for the supposed benefits of the trade agreements, "They're selling the American people a bill of goods," Mr. Tonelson said.
First Published November 17, 2011 12:00 am
