Thursday, November 18, 2010

WaPo whops Obama on KORUS FTA "setback"

It looks like the failure to get the KORUS FTA agreement done has put the FTA more in the spotlight than it ever was. The Washington Post has some somewhat harsh words for the President:
For those who believe, as we do, that free trade can help fight global recession and prepare the U.S. economy for a new, more competitive future, President Obama's trip to Asia was a disappointment. In particular, Mr. Obama's negotiators were unable to agree with their South Korean counterparts on revisions to a much-delayed U.S.-Korea free trade pact, as Mr. Obama had promised in June. Though both countries insisted the talks would continue, it's anyone's guess when Congress and the Korean National Assembly will finally get to vote on free trade between Korea and the United States.

This setback has many authors, including Korean protectionists who stoked a public overreaction to a long-ago mad-cow disease outbreak in the U.S. cattle herd. But Mr. Obama and his fellow Democrats in Congress have the most to answer for. ...

The vast majority of U.S. business sectors favor the deal, and it would help both economies to grow. However, congressional Democrats blocked it, arguing it would cost American jobs, and as a candidate for president in 2008 Mr. Obama rejected the deal as "badly flawed." In office, he dithered for months, before finally declaring himself in favor of moving forward with a revised treaty.

In opposing the deal during the campaign, Mr. Obama echoed claims by the Ford Motor Company and the United Auto Workers. Under the agreement, Korea and the U.S. would end their respective tariffs on autos and light trucks; Korea additionally pledged to reduce tax and regulatory obstacles to imports, and accepted a mechanism that could permit the US to reimpose tariffs if Korea tried to reestablish non-tariff barriers. Ford and the UAW say that isn't enough, insisting on guarantees that Korea won't use environmental and safety standards as a de facto bar to US vehicles. In the most recent talks, Mr. Obama has been trying to get the Koreans to meet him halfway on this point.
My disappointment with the article is their repetition of the Big Lie:
It's true, as Ford says, that, before the recession, Korean companies sold more than 700,000 cars per year in the US, about 100 times as many as U.S. companies sold in Korea.
Not quite, WaPo. Last I checked, General Motors is a US company, and they are the owners of GM Daewoo, which sold nearly 60,000 cars in South Korea in September alone. When GM's Daewoo vehicles are added to the US side of the calculation, the numbers are far more balanced.

Still, the WaPo redeemed itself a bit by pointing out some other points to consider, mainly that car markets of wildly different sizes will not have car sales parity even if all other things were equal, plus there are all those US-built Hyundais and Kias:
But the US market is 16 times larger than Korea's; and about a third of Korean cars sold in the U.S. are built in U.S. plants, not imported. Maybe what really worries Ford is not the lack of US access to the Korean market, but the potential for increased Korean access to the US market.
All in all, a good article, and I hope more people will realize how many billions of dollars in economic growth the US is missing out on because of the temper tantrums of Ford, Chrysler, and Senator Max Baucus.

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