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August 23, 2010

DC Elites Pushing Korea Trade Pact

-- by Dave Johnson

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

The way a lobbyist argues for or against anything today is to say it will create or cost jobs.

Prohibiting lawsuits against giant corporations that harm people creates jobs. Making oil drilling safer costs jobs. Tax cuts for the rich creates jobs. Just getting rid of government will create jobs.

So, of course, we hear now that passing the South Korea trade pact will create jobs. From the Washington Post today.

...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.

Maybe, and maybe not. South Korea currently has high tariffs and other restrictions on American goods, so a trade pact that gets rid of these tariffs would increase American exports, creating American jobs. As the story says,

[South Korea] remains in some ways a closed shop with extensive tariffs, a paltry share of its large auto market devoted to imports, and a notorious set of non-tariff barriers that has prompted companies such as Peoria-based Caterpillar to complain that their products are routinely excluded for minor regulatory problems.
But ...
Skeptics of the proposed agreement include some major corporate interests such as Ford Motor Co., which argues that the pact isn't aggressive enough in trying to open the South Korean market. Ford officials, for instance, noted that imports now represent less than 5 percent of South Korea's auto market.

Unions, environmental advocacy groups and other organizations, meanwhile, are urging Obama to keep his campaign promises and stiffen the terms for South Korean access to the U.S. market.

Meanwhile, Pork Magazine writes,

The latest supporter is South Korean Ambassador Han Duk-soo, who has assumed the unusual role of a foreign official promoting U.S. jobs. "This is an opportunity to stimulate the U.S. economy at no cost to U.S. taxpayers,” he says.
The Koreans are telling us how good this pact will be for us? That is a warning sign. Their job is to take care of (certain interests in) Korea. Our government's job should be to take care of our interests - meaning ours - We, the People - not the interests of a few wealthy executives and major owners of a few big, multinational corporations.

There are jobs and then there are jobs. There are good jobs that raise living standards and enable people to buy things others make, and there are low-paying jobs that companies use to extort concessions from workers and communities that create a worldwide race to the bottom. And there are trade deals and then there are trade deals. There are trade deals that help working people on both sides of a trade boundary. And there are trade deals that allow companies to ship jobs overseas and evade the protections our democracy has fought so hard to build.

This trade deal was negotiated by the George W. Bush administration. This (along with the South Korean ambassador pushing this treaty as good for America) is a warning flag if every there was one. The Center for Economic and Policy Research writes,

The trade agenda of the United States had been about reducing barriers to trade in manufactured goods with the purpose of putting non-college educated workers in direct competition with much lower paid workers in other countries. The predicted and actual result of this policy is to reduce the pay of non-college educated workers, thereby increasing inequality in the United States. This is a policy of one-sided protectionism. It has nothing to do with "free trade."

As I wrote last month: 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 our partners? This Korean trade deal 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.

I'll be following this debate as it continues.


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Posted by Dave Johnson at August 23, 2010 11:20 AM


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