Let’s move out of the tax-cut frying pan and into the South Korea free trade agreement fire. The Wall Street Journal says that KORUS, which is the nickname the White House has been using for the deal, is picking up support. But the first piece of their article concerns how Max Baucus, the chair of the Senate Finance Committee, is very frustrated by it:
But Sen. Max Baucus (D., Mont), chairman of the Finance Committee that has jurisdiction over trade, has said he is “deeply disappointed” with the deal and will reserve judgment until further progress is made on opening Korea’s market to U.S. beef. The revised pact contains new protections for U.S. auto makers, but didn’t change the original 2007 pact significantly when it came to beef.
Sen. Orrin Hatch (R., Utah), who will take over as the ranking Republican on the Finance Committee next year, also expressed reservations about some aspects of the deal, but said he would support its passage. He shares the concern about South Korea’s restrictions on imports of U.S. beef from cattle older than 30 months, given that beef accounts for nearly half of his state’s agriculture sales.
“Naturally I’d like more done” on beef, Mr. Hatch said Tuesday. “But I think what the president has done is a step in the right direction on Korea.”
Olympia Snowe hasn’t decided to support it yet, either. Baucus is chairing the committee the bill has to go through, and he wants the beef provisions renegotiated, something that South Korea has already said they won’t do. So while ultimately I think there’s more than enough support in the Senate Finance Committee and on the floor to get it done, at least from a first glance, that’s a serious obstacle. And the bigger issue is the House.
Meanwhile, while the President has promised that 70,000 jobs would be “supported” by the trade pact (he’s careful not to say created), the government’s own analysis finds that to be untrue.
In fact, the effect of the agreement on aggregate output and employment in the United States “would likely be negligible,” according to a federal study, largely because the United States economy is so much larger than that of South Korea. Indeed, the study found, the country’s overall trade deficit with the rest of the world is likely to grow slightly as a result of the agreement.
But the deal is likely to be beneficial to particular industries, including the Detroit automakers and manufacturers of industrial and electronic equipment and high-technology products like pharmaceuticals and medical devices, according to that study.
American manufacturers of textiles and clothing could be hurt, however, as relatively high American tariffs on those products are reduced.
I didn’t know there were any American textile manufacturers left. What, will American Apparel go down too from this?
Here’s that government study, and it does contradict any claim to major job creation coming out of this deal. Basically, the deal benefits multinational corporations and not American workers.
We’ll see this come up in the next Congress.