Congress recently approved free trade agreements (FTAs) with Panama, Colombia and South Korea. This is great news for Arizonans, because agreements such as these are among the most proven and effective ways to generate U.S. jobs and increase wages for workers.
It’s easy to understand why: the United States already has open markets and relatively low (or no) tariffs on most imports, but many other nations put punitive tariffs on American-made products. Therefore, these FTAs help knock down barriers to other countries buying our goods and services, allowing American businesses to compete and sell products stamped “Made in the USA” to more and more consumers (in fact, fully 95 percent of potential customers for our U.S.-manufactured products live beyond our borders). This, logically, leads to growth and job creation here at home.
Accordingly, the U.S. International Trade Commission projects that these agreements will increase American exports by at least $12 billion and grow our economy by more than $14 billion. The White House expects they will create at least a quarter million U.S. jobs.
The benefits of these trade agreements are
obvious. So, why did it take so long for President Obama to send them to Congress — he could have done so on the first day he took office? With millions of Americans out of work and persistently high unemployment, it took more than 990 days pass before Congress was able to act on these agreements.
The truth is, they were held hostage by the White House in its efforts to renew an ineffective, costly, and unproven federal spending program, known as Trade Adjustment Assistance (TAA).
TAA is a collection of separate initiatives originally designed to provide job training, relocation allowances, and unemployment pay for workers who have been adversely affected by trade agreements. The program was expanded in President Obama’s first stimulus bill to include more people and provide even greater payouts.
However, the fundamental problem with TAA is its premise: that global trade hurts America. As the numbers I cited show, the facts simply do not support that premise. More trade helps American workers.
Moreover, TAA will cost American taxpayers $6 billion over the next three years. Finally, there is little evidence that TAA programs are even effective. There are already more than 40 other federal programs dedicated to worker training, so this is duplicative at best.
A recent report by the Heritage Foundation confirms the ineffectiveness of TAA. Through its program evaluations, it found that there was not “any evidence that this assistance and training improves workers’ earnings based on newly acquired job skills.” Moreover, “a propensity score analysis by Professor Kara M. Reynolds of American University and a colleague found ‘little evidence that it helps displaced workers find new, well-paying employment opportunities.’ In fact, TAA participants experienced a wage loss of 10 percent.”
For these reasons and others, I voted against extending and expanding the Trade Adjustment Assistance program, though they ultimately passed Congress. Of course, I supported the three FTAs, which also passed.
Now it’s time to look to the future. We’ve finally passed these critical job-creating agreements, and that’s good news. But that’s only the first step on a much longer path we must follow if we truly want to create an environment that encourages long-term U.S. growth and job creation. We need the president to start aggressively negotiating more agreements to knock down the barriers to American products by other countries. And we need to be given the opportunity to pass them in a timely manner.
No more holding American jobs hostage to ineffective programs like TAA. No more excuses. Let’s get our economy back on solid footing for the future.
Sen. Jon Kyl is the Senate Republican Whip and serves on the Senate Finance and Judiciary committees. Visit his Web site at www.kyl.senate.gov or his YouTube channel at www.youtube.com/senjonkyl.