The National Association of Manufacturers Blog has a brief mention of the reasons why the U.S.-Korean Free Trade Agreement (KOR-US FTA) is a benefit to American manufacturers and will not lead to the outsouricng of more jobs as President Obama is now alleging.
The blog post notes that:
Not to belabor a point that has been raised by international economists and trade policy analysts across the political spectrum: Cutting tariffs and non-tariff barriers in foreign markets through preferential trade agreements does not reduce or outsource American factory jobs, it creates more of them. How? Our market is open, with tariffs averaging 2.5 percent. Most other markets (developing as well as some developed) in the world have tariff and non-tariff barriers that are far higher. When we sign a FTA with a country, its barriers come down, and as a result, our exports go up, both in volume and value, and more than our imports from that country.
Voilà, increased exports. Since manufactured goods are two-thirds of our exports, when we increase those exports, we boost manufacturing output, employment, and growth here at home. While we have a trade deficit overall in manufactured goods, we have a trade SURPLUS in manufacturing with our free trade agreement partners – more than $50 billion worth over the last two years.
- KORUS FTA: Impacts on Trade & Investment for Korea and the States (Guest Post by NerdWallet Journalist)
- Benefits to Korea in Free Trade Agreements with EU, ASEAN, US and Chile?
- Korea inks FTA with China
- New Zealand-Korea FTA Signed: Opportunities Abound for New Zealand Exporters
- Why are American Cars not Popular in Korea?: Decrease in Duties from FTA has not Helped Market Share
- How post-FTA Wholesale and Retail Markets Work in Korea