Korea Trade Deal NAFTA Redux or Change We Can Believe In

Dave Johnson

Trade is good. Honest, free and fair trade brings prosperity to everyone involved. Unfortunately the kind of one-sided, exploitative trade deals that have been negotiated in the past might have made a few elites very rich in the short term but threaten to impoverish everyone else. The trick is negotiating better “We, the People” outcomes rather than “shut up and take it or we’ll move your job out of the country” outcomes that allow the wealthy elite to set working people here against working people there.

President Obama is spot on when he says we need to balance our trade to help get the country back on a sound financial footing. Of course one key to this is breaking our oil-import addiction. Another is how we resond to the mercantilist nations of Asia.

Which brings us to KORUS, the Korea-US Free Trade Agreement. As negotiated by Bush, it is typically one-sided and doesn’t sufficiently protect American workers or companies. When the AFL-CIO and Ford Motor Company want some work done on a treaty, some work needs to be done on the treaty.

South Korean trade deal pits Obama against labor base,

“We don’t think it’s a good move economically or politically,” said Thea Lee, a trade lobbyist for the AFL-CIO.

. . . The South Korean trade agreement was signed in 2007 and has languished since Obama took office because of opposition not only from labor unions, but from the Ford Motor Co.

Ford and the United Autoworkers argue South Korean non-tariff barriers have blocked most trade in U.S. vehicles, and that the deal negotiated by the Bush administration does little to change this.

Jeff Faux, from the Economic Policy Institute, writes in a letter to the Washington Post,

The reality is that the U.S. economy — as opposed to U.S.-headquartered multinationals — is not internationally competitive. We are running chronic trade deficits in traditional and high-tech industries. Before any more agreements are signed, we need a serious, large-scale commitment to upgrading our infrastructure, skills and industrial technology for domestic production. Otherwise, the Korea trade pact will just dig us deeper into our financial hole.

Korea’s position is simple, Korea not to budge on FTA concessions with U.S.,

Kim Jong-hoon, the trade minister at the Ministry of Foreign Affairs and Trade, said yesterday that there would be no renegotiations or changes made to the original Korea-United States Free Trade Agreement.

. . . “Taking just one period – one comma – out of the agreement will mean a complete revision. This will not happen,” he told reporters at a press briefing.

Is that the trading partner attitude we really want to encourage? Or can we do better for everyone involved?

This is a test and an opportunity. Does the accord show a path to a new way of relating to trade that will help us and out partners? KORUS should be revised into a model for how we change our trade relations with countries like Korea and China. We can trade in ways that benefit both sides, not just one side.

But the National Potato Council likes it.

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