Free Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy, January 6, 2011

摘要

Free trade areas (FTAs) are arrangements among two or more countries under which they agree to eliminate tariffs and nontariff barriers on trade in goods among themselves. However, each country maintains its own policies, including tariffs, on trade outside the region. In the last few years, the United States has engaged or has proposed to engage in negotiations to establish bilateral and regional free trade arrangements with a number of trading partners. Such arrangements are not new in U.S. trade policy. The United States has had a free trade arrangement with Israel since 1985 and with Canada since 1989, which was expanded to include Mexico and became the North American Free Trade Agreement (NAFTA) effective in January 1994. U.S. interest in bilateral and regional free trade arrangements surged, and the Bush Administration accelerated the pace of negotiations after the enactment of the Trade Promotion Authority in August 2002. U.S. participation in free trade agreements can occur only with the concurrence of the Congress. In addition, FTAs affect the U.S. economy, with the impact varying across sectors. The 112th Congress and the Obama Administration face the question of whether and when to act on three pending FTAswith Colombia, Panama, and South Korea. Although the Bush Administration signed these agreements, it and the leaders of the 110th Congress could not reach agreement on proceeding to enact them. No action was taken during the 111th Congress either. In addition, the Trade Promotion Authority (TPA) expired on July 1, 2007, meaning that any new FTAs agreed to would not likely receive expedited legislative consideration, unless the authority is renewed. In December 2010, U.S. and South Korean officials agreed to some modifications in the U.S.-South Korea FTA, and the President is expected to send implementing legislation to Congress sometime in 2011. The Administration had not indicated a timeline for the other two agreements.