Proposed U.S.-South Korea Free Trade Agreement and Potential Employment Effects: Analysis of Studies [April 11, 2011] [open pdf - 288KB]
"Congress plays a major role in formulating and implementing U.S. trade policy through its Constitutional role in regulating foreign commerce. This role includes providing authority to the President to conclude trade agreements to eliminate and reduce tariff and non-tariff barriers to U.S. trade with other countries. For Members of Congress, trade can be a difficult issue, because decisions that liberalize trade flows have mixed effects on U.S. domestic and foreign interests, both economic and political. Historically, Congress has supported policies to open international markets to U.S. goods, services, and agriculture. It also has weighed carefully the economic impact of trade agreements to asses their benefits and costs. Congress also has enacted targeted adjustment assistance programs to provide training and other assistance to help workers and firms that may be dislocated by greater market opening adjust to new economic opportunities. With likely congressional consideration of a proposed free trade agreement between the United States and South Korea (KORUS-FTA), a number of estimates are being offered to quantify potential effects of the FTA [Free Trade Agreement] on U.S. employment. This report will discuss the models that are used to estimate the employment effects of the agreement and their various assumptions that are necessary in order for the model to generate results. Invariably, these assumptions determine to some extent the results that are generated and, therefore, limit their representation of the real world economy. The models also are highly sensitive to the assumptions that are used to establish the parameters of the models and are hampered by a lack of data in some areas."
CRS Report for Congress, R41660