Free trade is an issue Republicans can work with President Obama on when they take full control of Congress in January. The Obama administration has already been negotiating multiple free trade agreements, but those agreements will require congressional approval when finalized.
Unfortunately, some trade agreements do not expand free markets and instead grant advantages to special interests. Trade deals should knock down economic barriers, not enact new regulations.
Here are three areas the U.S. can expand free trade in 2015:
Pacific Rim
The Trans-Pacific Partnership is a proposed free trade agreement between the U.S., Canada, Mexico and nine other countries with Pacific coastlines, including Australia, Japan and Vietnam.
The agreement has been used as an example of a free trade agreement that does not actually encourage free trade. Some of the controversial provisions tighten intellectual property laws that will benefit a select few special interest groups, such as the recording and pharmaceutical industries. Internet service providers would be hurt, because the agreement makes them more liable for material that infringes on copyrights. Other provisions would add labor and environmental regulations.
Still, the Trans-Pacific Partnership would reduce tariffs that hurt U.S. businesses and consumers. According to the U.S. Trade Representative, U.S. businesses ship “more than $1.9 billion in goods to TPP countries every day.” Reducing tariffs on these shipments would unlock more economic potential for American exporters.
Europe
The Transatlantic Trade and Investment Partnership is a proposed free trade agreement between the U.S. and the European Union, which now includes over 500 million people living in 28 countries. Despite its size, U.S. businesses only send $730 million a day in goods to E.U. countries. This number would likely rise if tariffs were reduced.
“We seek to eliminate all tariffs and other duties and charges on trade in agricultural, industrial and consumer products between the United States and the EU, with substantial duty elimination on entry into force of the agreement,” the U.S. Trade Representative wrote regarding trade negotiations with the E.U.
Eliminating non-tariff barriers on trade with E.U. countries would also be an economic boost, but the U.S. might risk some of its sovereignty to do so. In negotiations over regulations, the U.S. should ensure that the E.U. moves toward reducing its regulatory burden to come in line with U.S. levels.
Africa
Through the African Growth and Opportunity Act, eligible countries can export more duty-free goods to the U.S. The legislation granted the president discretion to determine eligibility.
There are 39 eligible countries, including South Africa, Nigeria and South Sudan. Ineligible countries include Zimbabwe, Sudan and the Democratic Republic of the Congo, which was previously eligible but lost that status in 2011. Twenty-seven of the 39 countries are considered less-developed and are also eligible to export apparel and textiles duty-free.
AGOA will expire on Sept. 30, 2015, unless Congress works with the president to extend the legislation. U.S. consumers benefit from access to cheaper and more unique African goods. At the same time, African economies benefit from easier access to U.S. markets, providing jobs for developing African countries.
Free trade issues will provide an opportunity for economic progress in 2015, assuming Obama continues to negotiate in favor of fewer tariffs and the Republican Congress can keep trade agreements from adding to the regulatory burden. Republicans should work together with Obama on free trade for the betterment of the U.S. and global economy.
