WASHINGTON — Congress resoundingly approved long-stalled trade agreements with South Korea, Colombia and Panama late Wednesday, authorizing the most significant expansion of trade relations in nearly two decades.
While the deals with Colombia and Panama are likely to have limited economic impact, the agreement with South Korea is designed to break down barriers between the United States and the world’s 15th-largest economy.
The South Korea deal has the potential to create as many 280,000 American jobs , according to an assessment by the staff of the U.S. International Trade Commission, and to boost exports by more than $12 billion. Major labor unions have warned that any gains will come at the cost of layoffs among American workers because of heightened competition from Korean imports.
The Korea deal is widely hailed as the most consequential trade pact since the North American Free Trade Agreement was ratified in 1994.
The approval represents a major victory for the Obama administration as well as congressional leaders in both parties, who have touted the trade pacts as a means to jump-start the flagging economy without additional government spending.
Various U.S. industries are expected to benefit from the agreements. American producers of beef, dairy, pork and poultry products, chemicals, and plastics are all likely to increase exports to South Korea. The banking and financial-services industries could also be big winners, analysts said, benefiting from relaxed regulations and rules relating to foreign investment.
“These free-trade agreements will give our economy a much-needed shot in the arm and create tens of thousands of American jobs,” said Sen. Max Baucus, D-Mont. “The passage of these agreements today is a significant victory for American workers and businesses, and will help create jobs here at home.”
Several Democrats and prominent labor unions, however, oppose the deals, arguing that they could help U.S. companies without bringing much benefit to U.S. workers, particularly if increased imports lead to widespread layoffs. Some also argue that the agreements serve to reward two countries, Panama and Colombia, that have been hostile to organized labor and international environmental standards.
To soften the blow of imports, Congress also renewed the Trade Adjustment Assistance Program, which provides job retraining and temporary income support to workers who lose their jobs as a result of free-trade agreements.
