Kay Scrimger and Kathy Wiggins
October 17, 2011

Congress overwhelmingly passed late on October 12 free trade agreements with South Korea, Colombia, and Panama.

The legislation also included Trade Adjustment Assistance (TAA) reforms and key preference programs. President Barack Obama is expected to sign the initiatives into law in the coming days.

U.S. Trade Representative (USTR) Ron Kirk pointed out that the agreements “will strengthen and expand ties with strategic partners in Asia and Latin America, even as they support tens of thousands of jobs here at home, from shop floors to farms to service firms across our country.”

Kirk noted that, “Taken together, these initiatives are the leading edge of a job-creating trade agenda that will open markets, level the playing field for our businesses and workers, and champion America’s working families in an age of tough global competition. They deserve the historic and widespread support they received in Congress tonight.”

Passage of TAA reforms represents a bipartisan, bicameral agreement to provide critical assistance, training and job opportunities for American workers.

It reauthorizes TAA retroactively from February 12, 2011 and through December 31, 2013 to cover workers who otherwise would have been eligible had TAA not expired. Key provisions of the reforms are set out below:

• Provides $575 million investment to train workers. The amendment authorizes $575 million for fiscal years 2012 and 2013, and prorates funds for the period beginning October 1, 2013 and ending December 31, 2013, thus ensuring states have ample funding to provide long-term job training.

• Gives more flexible training options and up to 130 weeks of training. The amendment provides training for up to 117 weeks, giving all workers the opportunity to receive long-term training, and provides an additional 13 weeks of training for workers if the training leads towards the completion of a degree or an industry-recognized credential. The agreement includes various training options, including opportunities for part-time training and pre-layoff training.

• Provides accessible wage insurance that works with other benefits. For workers who seek quick re-employment, the amendment provides wage insurance – 50 percent of the wage differential between the old job and the new job, up to $10,000 – to workers 50 years of age or older.

About 20 percent of U.S. manufactured goods are exported but only about four percent of U.S. services. The free trade agreements are expected to be a boon for service sector businesses, such as accounting, insurance, and law.

The U.S. International Trade Commission recently estimated that the agreement with South Korea has the potential to create 280,000 American jobs and to boost U.S. exports by more than $12 billion.

Opposition to the South Korea has come from several large labor unions, which warned that any gains from the deal will be offset by layoffs of American workers because of heightened competition from South Korean imports.

The Administration worked with the three countries in 2010 and 2011 to address issues related to each of the agreements. These included labor rights and worker protections in Colombia; greater U.S. access to the Korean auto market; and enhanced tax transparency and labor rights in Panama.

As Kirk has pointed out, once approved by Congress, agreements will enter into force only if trading partners are meeting their commitments. The USTR is now working to bring the agreements into force as soon as possible.