[A2k] Bloomberg: Biggest U.S. Free Trade Legislation Since 1994 Eases Protectionist Concern
thiru at keionline.org
Thu Oct 13 04:42:26 PDT 2011
Biggest U.S. Free Trade Legislation Since 1994 Eases Protectionist Concern
By Eric Martin and William McQuillen - Oct 13, 2011 4:45 AM GMT+0200
The U.S. Congress approved free- trade agreements with South Korea, Colombia and Panama, bringing an end to years of stalemate and offering what supporters said was the biggest opportunity for exporters in decades.
The bills go to President Barack Obama, who spent two years seeking to broaden Democratic support for pacts revised from initial agreements reached by his predecessor. The South Korea deal, the biggest for the U.S. since the North American Free Trade Agreement in 1994, removes duties on almost two-thirds of American farm exports, and phases out tariffs on more than 95 percent of industrial and consumer exports within five years.
Yesterday’s step may diminish concern that the U.S. will turn to protectionism amid an unemployment rate that exceeds 9 percent, coming a day after a Senate vote designed to punish China for an undervalued yuan. The approval may also give impetus to Obama’s trans-Pacific trade initiative, which Japan, the world’s third-largest economy, is considering joining.
The South Korea deal would boost American exports by as much as $10.9 billion in the first year in which it’s in full effect, according to the U.S. International Trade Commission. The accord with Colombia would increase exports as much as $1.1 billion a year. The U.S. Chamber of Commerce said the accords will prevent the loss of 380,000 jobs.
Companies such as Ace Ltd., Citigroup Inc. (C) and Pfizer Inc. have led the effort to get the South Korea deal passed, while Caterpillar Inc., General Electric Co. and Whirlpool Corp. were among the biggest backers of the accord with Colombia.
“Japanese companies will be put in a further disadvantageous position compared with South Korean competitors in the U.S.,” Yoichi Kaneko, a ruling Democratic Party of Japan lawmaker said today in a telephone interview. “There is still an opposition within the DPJ but I think it’s important for Japan to join the TPP and free trade agreements.”
The South Korean tariff phase-outs increase market access for U.S. chemical, automobile, medical device and drug companies, and the end of duties on a range of agricultural exports benefits producers of meat, dairy, vegetables and fruits and nuts. Banks and communications companies would also gain opportunities through reductions in regulatory barriers.
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