Good news for Florida's businesses: The U.S.-Korea Trade Agreement officially takes effect today. As a result, local firms have more opportunities to sell their goods and services in the 12th-largest economy in the world. As we all know, exports are important to the nation's economic health and are vital to Florida's economy.
The enactment of this trade agreement is a boon for the local economy, helping to strengthen bottom lines and support quality American jobs at a time when our communities need them most, and I urge the Tampa business community to consider these new possibilities.
Here's how it works: Yesterday, in a variety of sectors — including machinery, chemicals and information technology, for example — U.S. companies had to pay a tariff rate to sell their goods and services in Korea. Not anymore. Today, many of these same companies can enter the market duty-free. Almost 80 percent of American exports of industrial products to Korea will be able to enter without getting taxed. The costs of doing business will drop. The potential for profits will grow. Opportunities for U.S. businesses to succeed in Korea will expand.
Floridians know this is important. History has shown that trade agreements are good for the local economy. For instance, since the nation's Free Trade Agreement with Chile was implemented in 2004, exports from Florida have jumped 171 percent.
Now that the U.S.-Korea Trade Agreement has taken effect, local businesses are well-positioned to see similar growth. This is a significant achievement, considering that from 2008 to 2010, Florida's exports to Korea already averaged nearly $400 million per year — a substantial amount.
As a Tampa native, I know firsthand just how important small and midsize businesses are to the fabric of this community. They put people to work and are essential for healthy economic development. For these reasons and more, we've got to give entrepreneurs every chance to succeed. Accordingly, we've got to help more business owners tap into the international markets.
Let's say you had friends who opened a store in WestShore Plaza, yet they decided to ignore roughly nine out of every 10 customers who walked by. Could they ever reach their full potential? Could they ever successfully compete with their neighbors?
Of course not. But that's what happens when U.S. companies don't export — 95 percent of the world's consumers live outside the United States. There are huge, unfulfilled opportunities overseas, and U.S. businesses must seize them. Selling U.S. goods and services abroad positively impacts balance sheets and jobs. The more firms export, the more our economy benefits.
I know how important trade is here. Take a look at the most recent numbers: In 2009, nearly 38,000 companies exported goods from Florida locations; more than 36,000 of these businesses were small and medium-sized enterprises, the very companies that serve as the backbone of our middle class.
There is great potential to do so much more, and the U.S.-Korea Trade Agreement that the Obama administration worked hard to complete provides a new path to these opportunities. In addition to reducing tariffs, the agreement will help level the playing field, enhance transparency and strengthen protections for intellectual-property rights. One other point to note: Beginning today, Korea's $580 billion services market is now open for business — providing even more possibilities for U.S. businesses to explore.
In total, the removal of tariffs and other barriers stemming from this trade agreement is expected to increase U.S. goods exports to South Korea by as much as $11 billion and support tens of thousands of additional American jobs.
In addition, President Obama also signed trade agreements with Panama and Colombia. These, too, will have major implications for Florida businesses and the Florida economy.
As the president said in his State of the Union address, we need an American economy that is built to last. Expanding our exports, increasing business opportunities and supporting small and midsize companies are important ways to realize this call to action.