Trade hasn’t been a subject that has received much ink during the Obama Administration. They haven’t sought to overhaul NAFTA or CAFTA, nor have they signed any new major trade deals. And in some cases, they have raised tariffs on certain imports, bolstering domestic manufacturing.
The White House says they’d like to double exports as a means of creating jobs and renewing economic growth. And they’re pitching the South Korea free trade agreement as a step along that path:
For three years, since it was negotiated by the Bush administration, the free-trade agreement has languished in Congress. Now trade officials from both countries are trying to resolve the problems that have kept it bottled up, including a dispute over U.S. access to the South Korean auto market and restrictions on U.S. beef imposed after the mad cow scare several years ago.
The agreement would eventually eliminate tariffs between the two countries. Because those levies are typically higher on the South Korean side, administration officials estimate the deal could mean more than $10 billion annually in increased U.S. exports to Seoul and tens of thousands of new U.S. jobs. South Koreans say they would benefit from lower prices — some tariffs on food imports from the U.S. are as high as 40 percent — and a more efficient flow of investment in and out of their country.
U.S. opponents of the agreement argue it doesn’t do enough to benefit American industry, even as it gives South Korean businesses greater rights in the United States.
The South Korean ambassador to the US has been touring the country lobbying for the free trade deal.
Free trade agreements were the subject of contentious debate during the Clinton and Bush years, and with the economy at a nadir, opponents of neoliberalism and globalization believe they’ve won the argument. The South Korea pact, which Obama and South Korean President Lee Myung-bak plan to revise and amend after the midterm elections, would restart that debate. South Korea’s economy is larger than any of the countries with which the Bush Administration signed free trade agreements, so it would be a major return to those policies.
In this case, traditional opponents like labor unions and environmentalists, who are both wary of the terms of the agreement and the potential loss of manufacturing jobs to outsourcing, are joined by some automakers like Ford and other corporations, who think the pact doesn’t force the doors open on the South Korean market to a great enough degree. And, times have changed from the 1990s, as more skeptics of free trade have entered the Democratic caucus:
Last month, more than 100 Democratic members of Congress signed a letter asking to meet Obama and discuss the agreement. They characterized it as “job killing” and “another NAFTA-style FTA that we simply cannot support in its current form.”
“There are two ways to go, and they have to decide,” said Lori Wallach, executive director of the global trade division at Public Citizen, which is critical of several aspects of the Korea agreement. “Push forward Bush’s text with minimal fixes — that would have enormous policy and political fallout — or they start to translate that old policy into the new model promised in the campaign.”
If the gains by Republicans are large enough in the midterm elections, this could become one of the first big fights of the next Congress.