So What's in the Trade Agreements with Colombia, Panama and Korea?
President Obama sent three trade agreements to Congress for approval. While each of the trade agreements were negotiated differently, they all share one common goal - to increase opportunities for U.S. businesses, farmers, and workers through improved access for their products and services in foreign markets. Each supports President Obama’s National Export Initiative goal of doubling U.S. exports by 2015.
All Trade Promotion Agreements have one thing in common. They reduce barriers to U.S. exports, and protect U.S. interests and enhance the rule of law in the partner country. The reduction of trade barriers and the creation of a more stable and transparent trading and investment environment make it easier and cheaper for U.S. companies to export their products and services to trading partner markets.This results in jobs here in America.
The most common question about these agreements is, "What exactly is in them?"
Below the fold are some of the key specifics for each agreement.
U.S.-Colombia Trade Promotion Agreement
The U.S.-Colombia Trade Promotion Agreement would open Colombia’s $134 billion services market to highly competitive American companies, supporting jobs for American workers in sectors ranging from delivery and telecommunications services to education and health care services.
The U.S. International Trade Commission estimates that the elimination of tariffs and related barriers in Colombia will increase U.S. Gross Domestic Product by nearly $2.5 billion and U.S. merchandise exports by $1.1 billion. Over 80% of U.S. exports of consumer and industrial products to Colombia will become duty free immediately, with remaining tariffs phased out over 10 years. With average tariffs on U.S. industrial exports ranging from 7.4 to 14.6%, this will substantially increase U.S. exports.
Key U.S. exports will gain immediate duty-free access to Colombia, including almost all products in the agriculture and construction equipment, aircraft and parts, auto parts, fertilizers and agro-chemicals, information technology equipment, medical and scientific equipment, and wood sectors. The agreement will support thousands of American jobs. Read these U.S.-Colombia Trade Promotion Agreement fact sheets for additional benefits for the manufacturing and service sectors, expanding markets for America’s farmers and ranchers, and labor protections under the U.S.-Colombia Trade Promotion Agreement.
U.S.‐Panama Trade Promotion Agreement
The U.S.‐Panama Trade Promotion Agreement is expected to increase U.S. exports to Panama by removing or reducing trade barriers in the Panamanian market and by leveling the tariff playing field.
98% of Panama’s exports to the U.S. entered duty-free in 2010, while fewer than 40% of U.S. goods entered Panama without tariffs. U.S. industrial goods currently face an average tariff of 7% in Panama, with some tariffs as high as 81%. U.S. agricultural goods face an average tariff of 15%, with some tariffs as high as 260%. Over 87% of U.S. exports of consumer and industrial products to Panama will become duty-free immediately, with remaining tariffs phased out over ten years.
U.S. products that will gain immediate duty-free access include information technology equipment, agricultural and construction equipment, aircraft and parts, medical and scientific equipment, environmental products, pharmaceuticals, fertilizers, and agro-chemicals. U.S. agricultural exports will also benefit. Panama will immediately eliminate duties on high-quality beef, frozen turkeys, soybeans, soybean meal, crude soybean and corn oil, almost all fruit and fruit products, wheat, peanuts, whey, cotton, and many processed products.
The U.S.-Panama Trade Promotion Agreement would also ensure that U.S. firms have an opportunity to participate on a competitive basis in the $5.25 billion Panama Canal expansion project. In addition to the ongoing $5.25 billion Panama Canal expansion project, the Government of Panama has identified almost $10 billion in other significant infrastructure projects. Construction equipment and infrastructure machinery used in such projects accounted for $280 million in U.S. exports to Panama in 2010. Tariffs for this sector average 5% with almost all being eliminated upon ratification of the agreement. Read these U.S.-Panama Trade Promotion Agreement fact sheets for additional benefits of tax transparency, labor protections and wins for America's farmers and ranchers under the U.S.-Panama Trade Promotion Agreement.
U.S.-Korea Trade Agreement
The U.S.-Korea Trade Agreement would open Korea’s $560 billion services market to highly competitive American companies, supporting jobs for American workers in sectors ranging from delivery and telecommunications services to education and health care services.
Within five years of enactment over 95% of bilateral trade in consumer and industrial products would become duty free and most remaining tariffs would be eliminated within 10 years. For agricultural products, the U.S.-Korea Trade Agreement would immediately eliminate or phase out tariffs and quotas on a broad range of products, with almost two-thirds (by value) of Korea’s agriculture imports from the United States becoming duty free upon enactment. The U.S. International Trade Commission estimates that the reduction of Korean tariffs and tariff-rate quotas on goods alone would add $10 billion to $12 billion to annual U.S. Gross Domestic Product and up to $11 billion in annual merchandise exports to Korea. The agreement will support tens of thousands of American jobs.
The U.S.-Korea Trade Agreement creates new opportunities for U.S. manufacturers seeking to export to Korea in two ways: first, it eliminates tariffs, or duties, charged when U.S. exports come into Korea; and it addresses non-tariff barriers to U.S. exports. The agreement improves market access for U.S. auto companies by addressing ways Korea’s system of automotive safety standards have served as a barrier to U.S. exports. The agreement’s provisions on cross-border services, telecommunications, and electronic commerce offer particular advantages to the information and communications technology service sector – an area where the United States excels – benefitting small- and medium-sized American enterprises without the resources to establish an office in every market they serve.
The U.S.-Korea trade agreement creates new opportunities for U.S. farmers, ranchers and food processors seeking to export to Korea’s 49 million consumers, giving American agricultural producers more market access in two ways – by getting rid of tariffs charged when U.S. exports come into Korea, and by laying out a framework to tackle other barriers to U.S. exports. The U.S.-Korea trade agreement increases investment opportunities for U.S. companies in Korea by providing them access to the market, strong investor protections, and a way for investors to enforce their rights. The financial services chapter in the U.S.-Korea agreement provides significantly improved market access into Korea for American financial services firms – supplementing and modifying the agreement’s rules on investment and services to allow American companies to provide financial services in the Korean market.
The agreement sets high standards for protection of workers’ rights in trade agreements – including obligations for Korea to respect fundamental labor rights, not to weaken the laws that reflect those rights in any way, and to effectively enforce labor laws designed to ensure a level playing field for American workers to compete. Read these U.S.-Korea Trade Agreement fact sheets for additional information about increasing U.S. auto exports and the overall economic value of the U.S.-Korea Trade Agreement.