EDITORIAL: Trade with South Korea

By | Friday, November 14, 2008

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President-elect Barack Obama has an opportunity to give the U.S. economy an immediate stimulus by encouraging Congress to pass the Korea-U.S. Free Trade Agreement. Rather than promising more taxpayer money to bail out faltering corporations, Mr. Obama could push for trade with South Korea, the 11th largest economy in the world and already America's seventh-largest trading partner. The former has huge costs, the later huge potential benefits.

There are currently four free-trade agreements - with Colombia, Peru, Panama and South Korea - that are awaiting congressional approval. Of these, the biggest prize for America is revision of the South Korean trade pact that expired in June. Korea's trade with America is almost three times the combined trade volumes of Peru, Panama and Colombia. A free-trade pact would give American automakers and farmers, in particular, access to Korean markets with vastly reduced or entirely eliminated tariffs.

Mr. Obama does not need to defend his support for the pact if he is questioned about appearing to backpedal from his campaign pronouncements. During the campaign, Mr. Obama repeatedly affirmed his commitment to free trade, but he said some trade agreements need to be revised to ensure labor and environmental standards. The U.S.-Korea pact includes "the labor and environmental provisions" required by the United States.

South Korean Ambassador Lee Tae-sik told editors and reporters of The Washington Times on Monday that there should be no fear that American companies will relocate to Korea at the expense of American workers because South Korea "is not a low-wage nation." He said the pact will create jobs for both Americans and Koreans. He also pointed out that South Korea is currently negotiating trade deals with the EU, Canada and India, among others, and that America should not relinquish market opportunities while other nations capitalize on them.

Mr. Obama has said it is essential that the U.S.-Korea pact provide sufficient safeguards for America's auto industry. Mr. Lee notes that the free-trade agreement has much support among America's leading automakers, including General Motors, which currently holds 12 percent of the Korean auto market. In addition, Hyundai generates 3,300 jobs in Alabama and Kia will create of 2,500 jobs in Georgia following the completion of a plant there in 2009.

It is also well to consider that the evolution of South Korea's free market and democratic society may, in the long run, provide inspiration to North Korea to abandon its authoritarian regime. Why not show the North Korean regime how prosperity can be created for all when nations demonstrate goodwill and engage in free and open trade?

There is no reasonable rationale for Mr. Obama and Congress to stand in the way of a trade pact that mutually benefits Americans and South Koreans - and that has the potential to help revolutionize Northeast Asia during these uncertain times in a global economy.

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