Wednesday, November 30, 2011

Congress Passes Controversial Free Trade Agreements

Congress approved free trade agreements Wednesday with South Korea, Colombia and Panama, ending a four-year drought in the forming of new trade partnerships and giving the White House and Capitol Hill the opportunity to show they can work together to stimulate the economy and put people back to work. The three landmark deals between the United States and trading partners South Korea, Colombia and Panama approved by the U.S. Congress late Wednesday represented the largest free trade agreements in the U.S. since 1994 and the first free trade agreement made by the U.S. since 2007.

Although free trade provides overall benefits, removing a trade barrier on a particular good hurts the shareholders and employees of the domestic industry that produces that good. Some of the groups that are hurt by foreign competition wield enough political power to obtain protection against imports. Consequently, barriers to trade continue to exist despite their sizable economic costs. According to the U.S. International Trade Commission, for example, the U.S. gain from removing trade restrictions on textiles and apparel would have been almost twelve billion dollars in 2002 alone. Read more....

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