Play Free Trade Agreements With These ETFs

Long held up due to partisan bickering on Capitol Hill, it looks like free trade agreements with Colombia, Panama and South Korea are inching closer to passage. Earlier this week, the House passed the Generalized System of Preferences (

), which reduce tariffs on imports from 130 countries and could open the door for these trade agreements to be passed. The trade agreements are still a long way from being a done deal, but President Obama did call for their passage in his jobs speech Thursday night. That could give the odds of passage a boost at a time when the President is desperate to foster job growth. Assuming Congress actually votes on these measures, here are the ETFs you'll want to watch. Direxion Airline Shares

: Yep, believe it. This thinly traded issue allocates 9.5% of its weight to Panama, by far the largest allocation of any ETF on the market. It's not a stretch to think passage of a free trade agreement with Panama would boost travel between the U.S. and the Latin American country, but in terms of ETFs, FLYX is a stretch as a direct beneficiary of free trade agreements. Global X FTSE Colombia 20 ETF

: Prior to Friday's carnage GXG had been holding up pretty well compared to other emerging markets ETFs. Even with all the negativity surrounding emerging markets as an asset class, the long-term bull case for investing in Colombia remains solidly in tact and passage of a free trade agreement with the U.S. could be just the elixir need to give GXG a jolt. Also consider the newer Market Vectors Colombia ETF

. iShares MSCI South Korea Index Fund

: By some estimates, a free trade pact with South Korea would create 250,000 new jobs in the U.S., so why the agreement hasn't passed yet underscores the pervasive partisanship on Capitol Hill. Since EWY is one of the largest emerging markets ETFs on the market and it tracks large-cap companies, it might take a while for the free trade agreement, when finally passed, to make a material difference on EWY's fortunes. For an ETF that might move more in the near-term on the news try the... IndexIQ South Korea Small Cap ETF

: Opening the U.S. to the legions of South Korean small-cap exporters would be a score for SKOR. In other words, SKOR could move the most in the near-term of any ETF on this list assuming good news comes on the free trade front. SKOR is offering some value right now and might be the better bet to play a rebound in South Korean stocks than EWY going forward, free trade agreement or not.