Failure to Implement U.S.-Korea and U.S.-Colombia Free Trade Agreements

The United States has completed negotiations of three FTAs that await Congressional approval of implementing legislation. The United States signed FTAs with Colombia on November 22, 2006, with Panama on June 28, 2007, and with Korea on June 30, 2007. Congress has not yet taken up any of these agreements.

 

Other major trading partners are also in the process of negotiating FTAs with Colombia and Korea. Canada completed negotiation of an FTA with Colombia and submitted it on March 26, 2009, for approval by the Canadian House of Commons. Canada completed negotiations of an FTA with Panama on August 11, 2009. The Canadian government describes its negotiations with Korea for an FTA as “well advanced.”

 

Similarly, the EU and Korea concluded negotiations on July 14, 2009, for a comprehensive FTA that is expected to be signed in late 2009 and implemented in 2010. The EU has held several negotiating rounds for a free trade agreement with Colombia that may also include Peru and Ecuador.

 

If the EU and Canada implement their FTAs with Korea and Colombia and the United States does not, exporters in the EU and Canada will enjoy a competitive advantage over U.S. exporters in the Korean and Colombian markets. Some U.S. export sales to these markets will be lost to exporters in the EU and Canada. The loss of export sales will have a negative impact on U.S. companies, national output and consequently U.S. jobs.

 

In addition, failure of the United States to implement its FTAs with Colombia and Korea will cost related exports, output and jobs. Specifically, failure to implement the U.S. FTAs while our trading partners go forward with their FTAs would lead to a decline of $40.2 billion in U.S. exports of goods and services and U.S. national output failing to grow by $44.8 billion. We estimate that the total net negative impact on U.S. employment from these trade and output losses could total 383,400.