Foreign Policy Blogs

Prospects for the U.S. – South Korea FTA

Well, I was wrong, The U.S. and South Korea did manage to get a Free Trade Agreement signed last month. This one, of course, replaces the FTA signed by President Bush in 2007. This deal is very similar to that one except it is better for the auto industry and worse for the meat industry. The deal is the largest FTA since NAFTA and the Obama Administration estimates it will increase U.S. exports by $10 billion per year.

 Now that the President has signed the FTA in still needs to be ratified by congress. This is going to present a whole new set of challenges for the White House. Below we will examine the position of different groups and their view of free trade.

 From the Left

 Thos on the left tend to take the position that trade is bad because it costs U.S. jobs. They maintain that lowering tariffs make foreign made goods cheaper which will encourage U.S. manufactures to move their production (and their jobs) overseas. There may be some truth to this but it is far too short sighted of a viewpoint. This viewpoint ignores the benefits brought by FTAs notably better and cheaper goods for all consumers. This creates a net benefit outweighing the loss of jobs for a few. Furthermore, the production of other goods will move to the U.S. as certain comparative advantages are realized.

 Mr. Obama himself took this anti-trade stance before becoming President. While on the campaign trail he emphasized the negative aspects of free trade and questioned the viability of NAFTA. Since taking office his stance has changed as he works towards his goal of doubling U.S. exports.

 From the Right

 Those on the right generally have a more positive view of trade but from time to time invent a whole host of evils associated with it. The tea party in particular seems to be taking on a decidedly mercantilist worldview. Furthermore Republican elected officials are not immune to the pressures of their constituents in agricultural or manufacturing areas pressuring them to vote against FTAs.

 Those on this side also tend to have a knee jerk “USA is best” attitude which results in the converse belief that “foreign stuff is bad.” This causes some on the far right to spin FTAs as anti-American.

 Perhaps most disappointingly, it seems to be the automation reaction of many conservatives to be automatically against anything the White House is in favor of.

 From the Center

 Those in the center from both parties tend to recognize the net benefits of global trade and support free trade agreements. The question now becomes are there enough of these rational centrists to get this FTA passed?

 President Obama mentioned the South Korea FTA in his state of the union address yesterday, stating “this agreement has unprecedented support from business and labor; Democrats and Republicans and I ask this Congress to pass it as soon as possible.” This is an issue that has a real possibility of bi-partisan support which may just help break the bitter deadlock we have seen in Washington over the last several years. Let’s hope our elected officials take this chance to so something good for the country.

Further Reading:

Washington Post: U.S., South Korea complete free-trade deal