Government Programs Hopeful to Generate Manufacturing Jobs

On Wednesday, September 7, 2011 the United States House of representatives voted to extend the trade program known as the Generalized System of Programs. The renewed program, which expired last year, allows tax-free entry for approximately 4,800 products from 130 developing countries. The renewal will extend the 35 year old bill through July of 2013 and will reimburse U.S. importers for any levies paid since the beginning of the year.

This bill could potentially pave the way for congressional approval of three free trade agreements with South Korea, Columbia and Panama in hopes of creating more jobs for Americans. President Obama supports the free trade bills, however has been holding off on submitting them to Congress until he is sure he will gain votes towards the workers aid program.

Before the recess in August, a few senators mentioned they agreed with both the free trade bills and the Trade Adjustment Assistant program, which provides job seeking assistance and benefits to workers who lost their jobs due to a move in production to outside the U.S. The program’s assistance for firms provides financial assistance to manufacturers who have also been affected by the import rivalry.  However, some Republicans are skeptical about the Trade Adjustment Assistance because it is expensive.

The free trade agreements with South Korea, Columbia and Panama could potentially escalate U.S. exports by about $10 billion per year. They may also aid the industry in generating more than 250,000 jobs for Americans. More than half of the tax free imports included in the free trade bill are raw materials, parts and machinery used for manufacturing products in the U.S.

By expanding export coverage the U.S will likely produce more manufacturing jobs for Americans and decrease the unemployment rate of the industry.