U.S. Free Trade Deals Passed, Textile Prices May Be Affected
On Oct. 12, the U.S. government passed three landmark free trade agreements with the countries of Columbia, Panama and South Korea. The deals are the largest U.S. trade agreements since the North American Free Trade Agreement (NAFTA) passed in 1993. It is also the first trade agreement to pass Congress since 2007, according to the New York Times.
While it's expected that American food exports will benefit the most from the deal, the federally run U.S. International Trade Commission predicting increased demand for livestock and dairy products, the trade deals could have meaningful impacts on the promotional products industry, particularly in the areas of textiles and manufacturing.
Proponents of the agreements cite ease of access to large new markets (South Korea being the world's 14th largest economy and seventh-largest U.S. trading partner), availability of lower-cost imported goods, and more competitive pricing with European Union countries (which already have a similar agreement with South Korea) all as perks of the deal. Those against the agreements, among other complaints, cite an imbalance in the scale of domestic and foreign markets, claiming American demand far outstrips that of the other countries. This inequality in demand may affect certain American manufacturing businesses negatively, such as the textile industry, where South Korean apparel manufacturers will not only have access to a far larger market, but also cheaper labor. The opponents claim these imbalances create a competitive impossibility, and will cause further American job loss at a time when national unemployment is already at 9.1 percent. It should be noted that the agreements do include provisions to aid and protect American workers put out of work due to the trade deals, articles that prior trade agreements did not possess.
The agreements passed Congress and the Senate largely unopposed, and only await signatures from President Obama and the South Korean government, both of which support the deals. For a more detailed explanation of the trade agreements, The New York Times and USA Today both have thorough articles available. Additionally, Just-Style.com further depth on the manufacturing risks and rewards at stake with the agreements.
What do you think? Will these deals affect your business in a good or bad way, or even at all? Let us know in the comments!