Expanding Economic Opportunity Through Free Trade

Last week, SBE Council released a new report titled “Trade, the Economy and Small Business.” It lays out the following:

• the basic economics on free trade,

• how the U.S. economy benefits from trade,

• the problems with protectionism,

• how NAFTA has boosted the U.S. economy,

• the increasing importance of trade to small business, and vise versa,

• and finally, a pro-trade, pro-growth agenda, including why it makes sense to pass the pending trade deals with Colombia, Panama and South Korea.

It also is worth noting a few points made in a fact sheet release by the White House on March 23 highlighting some positives regarding the deals with Colombia, Panama and South Korea:

• Approval and implementation of the U.S.-Colombia free trade agreement would eliminate tariffs on goods produced by several of the companies attending today's event, including:

- Case New Holland, a world leader in the manufacturing of agricultural and construction equipment, whose Fargo, North Dakota, plant exported about 48 percent of its production in 2007. The Case IH tractor faces a $15,500 tariff from Colombia.
- Cannondale Bicycle Corporation’s bicycles face a 20 percent tariff.
- Harley Davidson’s union-made Ultra Classic Electra Glide motorcycle, which faces a 20 percent tariff.
- Mack Truck’s Mack Granite Cement Mixer, which faces a tariff of 15 percent.
- John Deere’s Iowa-manufactured round baler, which faces a 10 percent tariff.

• The free trade agreement with Panama will increase U.S. access to one of the fastest-growing economies in Central America and support a key democratic partner. In 2007, Panama and the United States exchanged more than $4 billion worth of goods – nearly twice as much as just four years ago. The U.S.-Panama free trade agreement will build on this vibrant trade relationship by immediately eliminating tariffs on 88 percent of U.S. industrial and consumer goods exported to Panama and on more than 60 percent of U.S. agricultural exports.

• The free trade agreement with South Korea (KORUS FTA) has the potential to boost annual U.S. exports by more than $10 billion while cementing ties with a vital ally. The U.S. International Trade Commission estimates the reduction of Korean tariffs and tariff-rate quota provisions on goods market access alone would add $10-12 billion to annual U.S. GDP. South Korea is our seventh-largest trading partner and the KORUS FTA is the most economically significant FTA that the United States has signed in 15 years. The KORUS FTA will further open a growing market of 49 million consumers to the full range of U.S. goods and services. South Korea has a vibrant and rapidly growing economy and is located at the crossroads of world's most dynamic economic region.