This week, Congress approved bills which would establish free-trade agreements with Colombia, Panama, and South Korea. President Obama had sent the bills to Congress last week.
WUFT-FM’s Chris Peralta spoke with Director of the University of Florida Economic Analysis Program Jim Dewey about the role of free trade agreements in the economy, and what the benefits of such agreements might be.
Dewey: Speaking very broadly and in the very long term, if you can find a way to get products more cheaply, then you free up resources to do other things… That’s basically the argument in favor of it. On the other side, in shorter amounts of time, obviously there can be winners and losers. If I’m in an industry that faces much stiffer competition because of a free trade agreement, I could lose my job, I might not get an increase in pay, that sort of thing.
In the very, very long run, you can sort of imagine that people can get retrained and that sort of thing, so eventually you want to make it easy for everyone to take advantage of the cheapest possible—or the most efficient possible—means of production. But in the short run, that can definitely impose burdens on individuals.
The other side of it is that gets especially tricky when you’re in the middle of a recession and you’re trying to do what you can to build employment.
Hear the full interview above.