US Free Trade Agreements

US Free Trade Agreements (FTAs) expand free trade between America and its trading partners by dismantling both tariff and non tariff barriers.

Free Trade provides USA with access to the global marketplace outside the country, where more than 95 per cent of the consumers live. Thus it generates more income and employment in America. Moreover, at the same time, freer trade enables better quality goods reach the Americans at more affordable prices, giving them higher real income and better living standards with more purchasing power.

Further, free trade allows the participating countries with different competitive advantages and core competencies to trade under minimum restrictions, in order to capitalize on those differences to the benefit of all. Thus FTAs enhance the volume of international trade through specialization and division of labor.

In addition, FTAs have essential stipulations that safeguard investors from discrimina­tion, increase regulatory transparency, enforce intellectual property rights, protect labor rights, and support environmental protection.

No wonder, freer international trade stimulates innovation, leads to better product development, creates higher paying jobs, generates higher savings and investments and boosts overall economic growth cutting across national boundaries.

In contrast to FTAs, protectionist trade policies reduce output, income and employment. Such restrictive arrangements also affect the availability of goods and services at reasonable prices.

Free trade agreements need approval of the Congress. The Congress should support bilateral free trade agreements and ratify concluded agreements promptly. The President also needs authority to sign trade deals designed to expand free trade. By virtue of the existing trade promotion authority (TPA), the Congress can accept or reject any trade agreement as a whole but does not enjoy the flexibility to modify the same in part. The President must also conform to the parameters set by the Congress, in each and every trade agreement. Under the present arrangement, the Administration must notify the Congress at least 90 days before launching any negotiations for a trade deal. Both before and after such notice, the US Trade Representative (USTR) must continue to interact throughout the negotiation process with the concerned Congressional committees and oversight groups on the possible free trade agreements. Such constant touch with the Congress removes uncertainty by ensuring that that the said body will ratify the FTAs after negotiations have been concluded.

Thus TPA sets acceptable norms for FTAs and fortifies the President with powers to negotiate and conclude FTAs effectively and quickly.