By Troy Stangarone
After months of discussion on how to proceed legislatively on the three pending free trade agreements and Trade Adjustment Assistance (TAA), the White House formally submitted the KORUS FTA to Congress on October 3. The submission comes more than four years after the KORUS FTA was initially concluded and three months after Korea’s FTA with the European Union came into effect.
What can we expect moving forward?
Now that the White House has submitted the pending FTAs with Korea, Colombia, and Panama, the formal process for their passage has been set in motion. Under Trade Promotion Authority, Congress has up to 90 legislative days to approve the pending trade agreements, but the expectation is that the process will move much quicker as there is bipartisan support for the FTAs in both houses of Congress and Speaker Boehner has committed to moving the FTAs and TAA in tandem.
With President Lee Myung-bak set to arrive in Washington, DC for a summit on October 12-13 there will be growing pressure to finish this process before he arrives. Realistically, only the House will vote on all three agreements prior to the summit, as well as legislation to reauthorize the Generalized System of Preferences (GSP) and TAA. However, because of the short timeframe the Senate may not take up the FTAs until after President Lee’s visit. Should the Senate pass the KORUS FTA before the end of October, the agreement could come into force by January 1.
What potential obstacles remain?
The main obstacle could still be TAA. In the current political environment trust has been in short supply. Democrats have doubted Republican intentions to support worker retraining they see as essential for expanded free trade, while Republicans have held similar doubts about Democratic intentions regarding the Colombia FTA. These are the same concerns which held up earlier submission of all three agreements and continue to linger.
BNA, a trade publication, recently reported that more the 200 House Republicans are expected to vote against the inclusion of TAA in legislation to renew GSP. If House Republicans were to succeed in preventing the passage of TAA, the Senate would likely withhold passage of the FTAs until a resolution is found on passage of TAA.
What does submission of the KORUS FTA mean?
Now that the FTA has been submitted its passage should be largely assured if the potential obstacles with TAA and the Colombia FTA can be avoided. While the process needs to be concluded, Congress has never voted down an FTA once it has been submitted by an administration. To do so would be a significant foreign and economic policy setback for the United States at time when its global leadership is already under question. Given the strong nature of the U.S.-Korea alliance, most observers see the KORUS FTA passing with significant bipartisan support in both houses of Congress.
Troy Stangarone is the Senior Director for Congressional Affairs and Trade for the Korea Economic Institute. His views are his own.
Photo by Phil Roeder