Highlights of new trade agreements

AP News
Posted: Oct 12, 2011 1:34 PM
Highlights of new trade agreements

A look at the free trade agreements with South Korea, Colombia and Panama awaiting congressional approval:

South Korea:

The country: South Korea is a presidential republic with a population of 49 million and a per capita income of $30,000. It is the world's 13th largest economy and the United States' seventh-largest trading partner. Last year U.S. exports to South Korea totaled $38.8 billion and imports from South Korea were $48.9 billion. South Korea exported 515,000 vehicles to the United States and bought only 14,000, a difference that accounted for 75 percent of the $10 billion trade gap.

The agreement: As the most substantial trade accord since the North American Free Trade Agreement in 1995, the dealt would make 95 percent of American consumer and industrial goods duty free in South Korea within five years. The Obama administration says it will increase U.S. exports by more than $10 billion and create 70,000 American jobs.

Currently Korean duties on manufactured imports are about 8 percent, double the U.S. average. Duties on agriculture goods average 54 percent, compared with 9 percent U.S. duties for South Korean goods sold in the United States.

The agreement would increase protections against copyright infringements and counterfeiting and open access to South Korean government procurement and service markets such as telecommunications.

The administration last December negotiated changes in the agreement to remove nontariff barriers and other obstacles to U.S. access to South Korea's auto market.

The opposition: U.S. labor organizations and others dispute claims of job creation and say the deal will result in the loss of tens of thousands of American manufacturing jobs. They also say the agreement does not adequately eliminate loopholes that might allow Chinese products or goods produced in a North Korean industrial zone to be shipped through South Korea and enter the United States duty free.



The country: Colombia has a population of 45 million with a per capita income of $9,800. After two decades of turmoil, when the country was plagued by drug cartels, guerrilla insurgencies and paramilitaries, there has been a reduction of violence in recent years. President Juan Manual Santos, who took office in August, is a strong U.S. ally.

The United States imported $15.7 billion from Colombia in 2010, about two-thirds of which were oil and other mineral fuels, and had exports to Colombia totaling $12.1 billion. Colombia buys more American manufactured goods than any South American country except Brazil.

The agreement: Almost no duties now exist on Colombian goods sold in the United States. Colombian duties on U.S. manufactured goods average about 14 percent. Since the agreement was originally signed in November 2006, U.S. exporters have had to pay $3.8 billion in tariffs they would have avoided had the agreement been in effect. The agreement would eliminate duties on 80 percent of U.S. consumer and industrial exports.

The administration says the pact will boost U.S. exports by $1.1 billion and increase the U.S. gross domestic product by nearly $2.5 billion. It will provide new access to Colombia's $134 billion service market.

The opposition: In April President Barack Obama and Santos signed a Labor Action Plan that commits the Colombian government to protect labor rights, increase prosecutions for violence against labor organizers and end employer practices that prevent collective bargaining.

But labor and human rights groups, and many Democrats, complain that the action plan was not incorporated in the trade agreement itself and say Colombia has yet to show it can effectively control anti-labor violence. They cite figures that at least 22 trade unionists have been killed this year and say Colombia remains the most dangerous country in the world for labor organizers.



The country: The home of the Panama Canal has a population of 3.5 million with a per capita income of $13,000. Last year the U.S. exported $6 billion worth of goods to Panama and imported only $381 million.

The agreement: Currently almost all Panamanian agriculture goods enter the United States duty free, compared with a 40 percent duty on U.S. farm products sold in Panama. The average duty on U.S. imports from Panama is 7 percent.

The agreement eliminates more than 88 percent of Panama's tariffs on consumer and industrial goods and a majority of tariffs on farm exports. It also makes it easier for U.S. companies to compete for contracts in Panama's $5.25 billion expansion of the Panama Canal, through which passes 5 percent of all world trade. It strengthens international property rights and investor rights in Panama.

The opposition: Critics say Panama remains a tax haven where the rich can hide their money. Last November Panama and the U.S. signed a tax information exchange agreement to increase transparency in Panama's system of taxation.