Trade-off

The lead article in today’s New York Times, “Trade Deals Pass Congress, Ending Five-Year Standoff,” demonstrates that Congress is capable of working together if it really wants to. The pacts with South Korea, Colombia and Panama are projected to create 70,000 jobs, and they were passed in tandem with a benefits program for any workers who lose employment due to foreign competition.

Anyone who has taken Economics 101 can draw a simple graph showing the benefits of free trade over protectionism, and these agreements are a good idea. The South Korean pact is especially worthwhile because it provides strong guarantees for American automakers.

Kudos to President Obama for getting this done despite opposition by key elements of his base such as trade unions. The agreements will lower prices for American consumers as well.

The only real strong opposition to these agreements involved the Colombian trade legislation because many claimed it did not do enough to address the fact that many people trying to organize unions in that country had been murdered.

But I think the agreement itself helps us to get our foot in the door and influence future actions by the government and other elements of the society. If they know that egregious actions could endanger beneficial trade policy by the United States, they may become a bit more circumspect.