Kentucky families continue to work hard to make ends meet in an uncertain economy while unemployment remains unacceptably high. That is why one of my top priorities is advancing positive, commonsense economic policies that will help the private sector grow and hire. Congress made progress last week by passing trade agreements with Colombia, Panama and South Korea with broad bipartisan support.
By making American-made goods and products more competitive in the international marketplace, these agreements will help our manufacturers and farmers grow their businesses and hire new workers. More than 90 percent of the world’s consumers live outside the United States. To keep up in a global economy, we need to make sure our businesses and farms are in the best possible position to sell American.
Finalizing these long-overdue agreements will create an estimated 250,000 new American jobs according to the U.S. International Trade Commission. Additionally, the ITC reports that these agreements will increase U.S. exports by at least $13 billion and U.S. GDP by at least $10 billion, stimulating our economy without government spending.
Removing barriers to trade in Colombia, Panama and South Korea will directly benefit Kentucky as well. In 2010, trade supported over 52,000 jobs in the Commonwealth with over 228 companies exporting $19.1 billion of goods and services to nearly 200 foreign markets. Additionally, exports accounted for approximately twelve percent of Kentucky’s gross domestic product.
Kentucky farmers will be another beneficiary of these agreements. For example, with the immediate elimination of import taxes on nearly two-thirds of U.S. agricultural products shipped to South Korea, Kentucky farmers will have improved access to the Korean market to sell many of the products that have been highly protected in the past, including poultry and egg products, cattle and beef, feed grains, and others.
According to the American Farm Bureau, direct U.S. agricultural exports to South Korea, Colombia and Panama will increase by nearly $2.5 billion per year upon full implementation of these three agreements, and are expected to increase direct exports from Kentucky alone by more than $15 million per year.
Bourbon is another great example of a Kentucky industry that will be positively impacted by implementing these agreements. According to the Kentucky Distillers’ Association, this thriving signature industry supports 10,000 jobs. Currently, there is a twenty percent import tariff on bourbon in South Korea, giving an advantage to other spirits. However, this tariff will be eliminated immediately when the South Korea Trade Agreement is entered into force. This will make the Kentucky product more affordable to South Koreans and help the bourbon industry to grow here at home.
In addition to the mutual economic benefits, these agreements are important to our national security by improving our relationships with three strong U.S. allies in strategically important parts of the world.
Passage of these agreements demonstrates that members of Congress in both parties and the president can work together to find common ground and pass legislation that will help get the American people back to work. We have a long way to go before our economy is turned around, but passage of these agreements is a good step in the right direction for both Kentucky and the nation.