Our Two-Pesos: Low Prospects for Free Trade Agreements Given High Unemployment
The other day, a colleague of ours emailed an article criticizing the Obama Administration’s recent statements that passage of pending Free Trade Agreements (FTAs) with Korea, Colombia and Panama were likely going to take “years, rather than months.” The message implicit in the email was that, clearly, the Obama Administration (and Democratic leaders) aren’t taking trade seriously.
While it’s still hard to tell what trade priorities the Administration may have (although it’s good to see the 20% increase in budget for the International Trade Administration), looming over all of these issues is a big number: 10%. That’s the current unemployment rate, according to the Bureau of Labor Statistics (http://bit.ly/cjdv6).
It’s a hard, practical reality that the American public — not necessarily just the Administration — will likely find it hard to swallow public efforts to promote FTAs (viewed mainly as a potential “job loser”), until unemployment hits somewhere in the 6-8% range. And, yes, this will take “years, rather than months.”
We can decry the lack of support for more free trade agreements (a real concern, given that most of the rest of the world are embracing them) — but we have to also understand the current limitations. Since little effort has been made to really get the American public to “value” trade or to measure the “real-world” benefits of free trade agreements, we shouldn’t be surprised that it will be 2011 or 2012 before we see Korea, Colombia, and Panama as new, free trade partners.
That’s our two-pesos.