The U.S.-Korea Free Trade Agreement was proposed in June of 2007 and awaits congressional approval. The agreement would eliminate existing tariffs on many industrial and agricultural exports, consequently stimulating the US economy. As the Office of the United States Trade Representative reports:
“The U.S. International Trade Commission estimates that the reduction of Korean tariffs and tariff-rate quotas on goods alone would add $10 billion to $12 billion to annual U.S. Gross Domestic Product and around $10 billion to annual merchandise exports to Korea.”
The agreement would greatly increase Louisiana’s trade with Korea since the state is a large producer of agricultural and chemical products, goods that Korea needs to import. As the Foreign Agricultural Service outlines, Louisiana will benefit by exporting goods such as cotton, beef, soybeans, feed grains, poultry, and egg products. These exports would provide a substantial contribution to the state’s revenues.
It is crucial to eliminate trade barriers in order for a country’s economy to grow. As explained by the Cato Institute, tariffs and barriers distort market signals, undermine investment possibilities in new industries, and cause workers to forgo new and higher-paying opportunities.
Looking at the likely increases in US and Louisiana exports, the Congress should ratify the proposed trade agreement and expand investment opportunities in Korea.