Congressman Jim Himes (CT-4) helped pass bipartisan legislation today to implement free trade agreements between the United States and South Korea, Colombia, and Panama. In conjunction with these agreements, the U.S. House of Representatives approved a bill to assist workers affected by globalization and to allow the U.S. duty-free access to products from certain developing countries. The Senate is expected to approve all four pieces of legislation later this week, and President Obama will quickly sign the bills into law.
"Opening up global markets to U.S. goods and services is one of the most important things we can do to grow local companies and create jobs," Himes said. "These trade agreements will boost exports for dozens of companies right here in Southwest Connecticut."
Nearly 500,000 jobs in Connecticut depend on exports, and numerous Connecticut businesses will benefit from these agreements. The Colombian Free Trade agreement will eliminate the 20 percent tariff on the sun-care products Energizer Personal Care Products in Shelton exports and will end the 15 percent tariff H. Muehlster & Co. in Norwalk faces on its plastic exports to Colombia. The agreement with Korea will eliminate a 17.2 percent tariff Global Textile Imports in Weston pays to import fabric and end tariffs Arch Chemical and R.T. Vanderbilt in Norwalk pay to export their products to Korea. IBM, which has substantial operations in Norwalk, touted the agreements, as well.
"IBM commends Congressman Jim Himes on today's passage of the free trade agreements with South Korea, Colombia, and Panama, which will encourage U.S. job and economic growth, level the playing field for American businesses, and protect our intellectual property," Christopher Padilla, IBM Vice President of Governmental Programs said. "These trade agreements will sweep away most of the burdensome tariffs and trade barriers that put American workers and businesses at a competitive disadvantage. As IBM begins its second century, we congratulate Congress on its work to ensure that U.S. businesses and workers benefit from tremendous growth opportunities around the world."
The South Korea Free Trade Agreement will eliminate tariffs and other barriers to trade between the U.S. and South Korea. Currently, American goods face an average tariff of 6.2 percent in South Korea, while South Korean exports enter the U.S. at an average tariff of only 2.8 percent. Under the agreement, nearly 95 percent of trade between the countries becomes duty-free within three years, including many key U.S. exports such as industrial and consumer electronic machinery and parts, auto parts, power generation equipment, the majority of chemicals, medical and scientific equipment, motorcycles, and wood products. Most remaining tariffs will be eliminated within 10 years. Connecticut's Fourth District exported nearly $200 million in goods to Korea in 2010, which directly supported over 650 jobs.
The Panama Free Trade Agreement levels the playing field for exports from the United States to Panama by removing barriers to American goods entering Panama, improving protections for intellectual property, and expanding access to the services market, including services provided by banks and insurance companies. Currently, Panama enjoys duty-free status for over 99 percent of its exports to the U.S, but U.S. industrial goods currently face an average tariff of 7 percent in Panama, with some tariffs as high as 81 percent. Under this agreement, 80 percent of U.S. exports, including aircraft, electrical equipment, and medical and scientific equipment, become duty-free immediately.
The Colombia Free Trade Agreement will increase both trade and investment between the U.S. and Colombia, similar to the Panama agreement. Connecticut stands to benefit from improved business ties and provisions that will establish full access for banks and insurance companies to establish subsidiaries or branches in Colombia. In 2010, over 90 percent of Colombian products entered the U.S. market duty-free, while U.S. merchandise entering Colombia faced tariffs averaging 9 percent. The Colombian Free Trade Agreement will eliminate tariffs for over 87 percent of U.S. exports of consumer and industrial products (excluding petroleum) within 5 years.
A final bill passed today extends both the Generalized System of Preferences (GSP) and the Trade Adjustment Assistance Program (TAA). The extension of GSP will allow U.S. businesses and consumers to purchase over 4,800 various products at a lower cost. Pepperidge Farm in Norwalk, General Electric in Fairfield, Preferred Brands International in Stamford, and other companies throughout the Fourth District will all save money on raw materials they import. The TAA passed as part of this legislation provides benefits and support to U.S. workers who lose their jobs due to local economic changes resulting from international trade. TAA programs offer retraining opportunities, health insurance assistance, and other crucial support initiatives to workers affected by globalization.
All three agreements require each nation to adopt and enforce International Labor Organization standards and require both countries to enforce environmental protections.