A victory celebration and a wake for free trade

Hanjin container ship sailing on San Francisco Bay

Article Highlights

  • We can celebrate the trade liberalization #TPA brought about, but its existence was too short

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  • Votes in both the #House and #Senate demonstrate the clear bi-partisan support for trade liberalization

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  • If President #Obama is serious about the merits of free trade, he will call for renewal of #TPA

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Three important and long overdue free trade agreements (FTAs) passed Congress last week and are now headed to the White House for President Obama's signature. These bills, which establish FTAs with Panama, Colombia, and South Korea, were signed under the auspices of Trade Promotion Authority (TPA), legislation enacted in 2002 to empower the president to negotiate trade agreements, with Congress then fast-tracking consideration of the enacting legislation.

"We can celebrate the trade liberalization TPA brought about, but its existence was too short." -- Alex Brill

The three agreements were negotiated under President Bush before TPA expired in 2007. Collectively, these new agreements will increase U.S. exports by over $12 billion a year. Negotiations for the largest of the three, the pact with Korea, were led by then-U.S. Trade Representative and current U.S. Senator Rob Portman.

The agreement with Korea is the largest FTA since NAFTA, as Korea is our seventh-largest trading partner, and achievements embodied in that agreement will eliminate tariffs on 95 percent of U.S. exports to Korea within five years.

But the victory celebration for these three agreements is also a wake of sorts. Eleven FTAs with seventeen countries are now in effect. Each bill garnered bipartisan support, and each bill reduced trade barriers. While some agreements were quite small and served more strategic than economic purposes, all have been valuable steps toward more U.S. exports, increased competitiveness of U.S. firms, and more choices for U.S. consumers.

But, TPA has expired. No future FTAs will enjoy expedited consideration in Congress without its renewal. In short, the era of trade liberalization may have ended with the enactment of these three bills.

We can celebrate the trade liberalization TPA brought about, but its existence was too short.

President Obama indicated his seriousness about exports when he committed to double them by 2015, but he has given conflicting signals about his commitment to trade liberalization. While the administration has praised the passage of the FTAs with Panama, Colombia, and South Korea, the president waited far too long to submit the legislation to Congress. Votes in both the House and Senate demonstrate the clear bi-partisan support for trade liberalization, and the administration's own analysis indicates that the agreements will support 250,000 US jobs. Given the exhaustive rhetoric in Washington and singular focus on "job legislation," the delay is truly curious.

It won't be long before the three new agreements are in force, barriers to trade are reduced, and U.S. producers and U.S. consumers begin to reap the benefits. If President Obama is serious about the merits of free trade, he will call for renewal of TPA. But the president's dithering on these three recent FTAs does not bode well for any additional action on trade liberalization, at least not in this administration.

Alex Brill is a research fellow at AEI.

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About the Author


  • Alex Brill is a research fellow at the American Enterprise Institute (AEI), where he studies the impact of tax policy on the US economy as well as the fiscal, economic, and political consequences of tax, budget, health care, retirement security, and trade policies. He also works on health care reform, pharmaceutical spending and drug innovation, and unemployment insurance reform. Brill is the author of a pro-growth proposal to reduce the corporate tax rate to 25 percent, and “The Real Tax Burden: More than Dollars and Cents” (2011), coauthored with Alan D. Viard. He has testified numerous times before Congress on tax policy, labor markets and unemployment insurance, Social Security reform, fiscal stimulus, the manufacturing sector, and biologic drug competition.

    Before joining AEI, Brill served as the policy director and chief economist of the House Ways and Means Committee. Previously, he served on the staff of the White House Council of Economic Advisers. He has also served on the staff of the President's Fiscal Commission (Simpson-Bowles) and the Republican Platform Committee (2008).

    Brill has an M.A. in mathematical finance from Boston University and a B.A. in economics from Tufts University.

  • Phone: 202-862-5931
    Email: alex.brill@aei.org
  • Assistant Info

    Name: Brittany Pineros
    Phone: 202-862-5926
    Email: brittany.pineros@aei.org

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