Thursday, June 30, 2011

Republicans Desperately Want Free Trade Agreements; But Not if They Have to Provide Benefits to Workers Displaced by Them

Their Anti-Worker Attitude, Maybe They Just Cannot Help It

The U. S. has negotiated bi-lateral free trade agreements with South Korea, Columbia and Panama.  The treaties appear to be pro-growth, particularly with South Korea as reported by the Wall Street Journal.

The South Korea deal is by far the richest of the three, representing $11 billion a year in new U.S. exports. It would immediately eliminate Korean tariffs on nearly two-thirds of U.S. farm products, from corn to wheat. U.S. beef exports to Korea would more than double to $1.8 billion from $600 million. It would eliminate a 15% Korean tariff on U.S. wine and afford U.S. financial-services firms the same legal status as Korean firms.

The White House supports the treaties. The Republicans support the treaties.  The business community supports the treaties.  So why is there a problem?

Because in any free trade agreement there are winners and losers, the losers typically being workers who lose their jobs because of the increased imports.  To soften this suffering the Administration wants to link approval of the agreements

to the renewal in scaled-back form of the longtime Trade Adjustment Assistance program for workers hurt by foreign competition.

The Republican position is that any assistance to workers adversely affected by the agreements is so terrible that they would try to block the agreements rather than agree to such assistance.  In an attempt to appease Republicans, the Administration has already scaled down the program from $1 billion and

Business groups, including the U.S. Chamber of Commerce, backed Mr. Obama's efforts to revive the trade deals, which promise $13 billion a year in new export activity, far more than the trade-adjustment program would cost.

But apparently even $1 of aid to affected workers is too much.  The Republican leader of the Senate

Mr. McConnell said that "if the administration were to embed a TAA into the Korea trade agreement, I would be compelled to vote against it. I think this is making it needlessly complicated and contentious."

No what Mr. McConnell thinks is that it would benefit low and middle income workers  Can’t have that now, can we?  It wouldn't be cricket.

For Mr. McConnell and Conservatives, government benefits are only supposed to be used for upper income folks and for business.  And if it takes blocking a deal that would add $13 billion in exports to the economy, well ideological purity must surely come before economic growth and more jobs.

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