America's South Korean Trade Policy Falters
President Obama, Reworking Bush-Cheney Era Korean Foreign Trade Deal
Nov 10, 2009
Superceded by hot button issues like national healthcare, financial economic stimulus programs and the Copenhagen climate conference, the Obama administration has quietly sidelined the controversial Korean American Free Trade Agreement (KORUS-FTA.). This highly contentious bill, which critics say does little to benefit the America public, seems to have far more political ramifications than economic consequences.
American Free Trade
American free trade has come under fire once again during this world crisis. The public is demanding protection by its leaders, in ways that are similar to the “Buy American” provision placed in the recent $787 billion economic stimulus bill. Senator Max Baucus confirmed this sentiment during the March 2009 confirmation hearing of Ron Kirk, President Obama's nominee as U.S. trade representative. "Our consensus to advance international trade is frayed. [American’s] faith in the international trading system is badly shaken," Baucus purported.
Dr. Dean Baker, co-director of the Center for Economic and Policy Research and professor of economics at Bucknell University, said in an Aug. 3, 2009 editorial, “Trade agreements have a very bad public image in the U.S. There is good cause for this…. Three decades of this one-sided trade policy has badly hurt the living standards of most of the workforce…. The public blames trade agreements.”
Randall Soderquist, senior trade program associate at the Center for Global Development outlined the future. The U.S. will “…rethink priorities and what trade agreements look like…This could mean starting from scratch versus just taking the baton from the Bush administration," he stressed.
KORUS Free Trade Agreement
Many economists agree the South Korean accord will have a diminutive economic impact on the U.S. Dr. Baker alleged, “…the agreement…will also have relatively little impact on the U.S. economy (most goods from South Korea [already] enter the country with few restrictions)….” Bruce Klingner and Daniella Markheim of the conservative Heritage Foundation wrote on June 15th 2009, “The FTA would add…$10-$12 billion…to the U.S. GDP” - a mere 0.07% of America's total.
America’s Political Disagreement
Kirk said, in response to Bush era politics, “We're not going to do deals just for doing so.” KORUS, as currently written, "is simply unfair [and]…we are prepared to step away from that.” Wendy Cutler, Assistant U.S. Trade Representative for Japan and Korea reiterated Kirk’s statements last month. “There is no timeline assigned to this…a careful scrutiny of [the] agreement will be important for us.”
Barack Obama fortified the path for his representative in a June 2009 joint press conference with the Republic of South Korea’s President Lee Myung-bak. President Obama said, in response to a KORUS question, “In Korea there are issues of beef imports. In the United States [it’s]…cars….we want to work constructively…to clear some of these barriers… [And] then there's going to be the issue of political timing.”
Will KORUS Pass?
The U.S. pharmaceutical industry would certainly like the deal to pass; however, with national healthcare looming, Korea is not a high priority. Also the American financial services industry would like inroads into the South Korean market, but they too have greater priorities in the prevention of severe governmental regulation. Consequently, aside the South Korean government, there is little Washington lobbying for the agreement - whose future looks bleak.
Dr. Baker argues that the Obama Administration has bigger fish to fry and, “…it is almost inconceivable that the bill will come to a vote in 2009 and 2010 is an election year. So, those pushing for U.S. ratification…may want to mark 2011 on their calendars. It will not be happening any time sooner.”
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