Bilateral, regional, and multilateral trade agreements have had a small but positive effect on U.S. output, income, exports, imports, and employment, according to a recent report from the International Trade Commission.
This report assesses the economic impact on the U.S. of all trade agreements passed under trade authorities procedures since Jan. 1, 1984, including the Uruguay Round agreements, NAFTA, and bilateral or regional free trade agreements with Australia, Bahrain, Canada, Chile, Colombia, the Dominican Republic and five Central American countries (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua), Israel, Jordan, Korea, Morocco, Oman, Panama, Peru and Singapore. A previous, related report can be found here.
The report’s findings include the following.
- In 2017 trade agreements led to estimated increases of $88.8 billion (0.5 percent) in U.S. real GDP, 485,000 full-time equivalent jobs (0.3 percent), 0.3 percent in real wages, $98.3 billion (0.6 percent) in real income, $37.4 billion (1.6 percent) in exports, and $95.2 billion (3.4 percent) in imports. However, employment gains were not distributed evenly and the largest gains were estimated for male college-educated workers.
- Reciprocal trade agreements with services provisions that take a full liberalization approach, follow the U.S. approach to market access, and cover a full set of other substantive disciplines significantly increase cross-border trade in services for a number of key sectors.
- The effects of intellectual property rights provisions in RTAs that go beyond the requirements of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights are ambiguous.
- Including provisions governing trade in digital products and services in U.S. trade agreements has a positive effect on services trade that increases in sectors that are more digitally intensive.
- The U.S.-Colombia FTA increased certainty in trade conditions for Colombian firms over previous trade preferences, leading to a rise in the number of varieties imported into the U.S. from Colombia.
- A 2018 modification to the U.S.-Korea FTA led to small increases in the number of U.S. trucks sold to Korea and the profitability of U.S.-based truck producers.
- Provisions in the U.S. Peru FTA to combat illegal logging and deforestation and in a NAFTA side agreement to improve collective bargaining rights in Mexico have seen limited success.
- Due to the Peru and Colombia FTAs, U.S. yellow corn exporters have enjoyed a tariff advantage and reduced uncertainty over competing exporters.
- U.S. energy product exports to Korea rose sharply in both value and volume in recent years as U.S. producers and exporters took advantage of broad reductions in trade barriers under the U.S.-Korea FTA.
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