Unemployment remains high, with Wash-ington politicians promising to create more jobs.China is ever more confident, challenging theUnited States both economically and politically. The People’s Republic of China (PRC) has dis-placed America as the number one trading part-ner with leading East Asian states, such as SouthKorea.How have the Obama administration andDemocratic Congress responded to these chal-lenges? By retreating economically from theregion. As a candidate for president, then-senator Obama termed the U.S.–South Koreafree trade agreement (KORUS FTA) “badly flawed” and urged the Bush administration notto submit it for ratification.
At his confirmationhearing in March 2009, President Obama’s U.S. Trade Representative Ron Kirk called the agree-ment “unacceptable” and “just not fair.” Al-though increased trade with the Republic of Korea (ROK) is “one of the biggest opportunities we have,” he affirmed that the administration“will step away from that if we don’t get it right.”
That approach was remarkable for both itseconomic and geostrategic folly, but to theircredit, President Obama and his administrationhave wisely toned down their earlier objectionsto the agreement.
In fact, administration tradepolicy now may be undergoing a reset of sorts. The president used his last State of the Unionspeech to set the objective of doubling exportsover the next five years and pushing forward onpending FTAs with Colombia, Panama, andSouth Korea.Moreover, he met South Korean presidentLee Myung-bak at the June 2010 G20 Summitin Toronto and expressed his desire to revive theKorean agreement. President Obama said, “It isthe right thing to do for our country, it is theright thing to do for Korea.”
He added that theUnited States intended to work in a “methodicalfashion” to meet congressional objections.
Ad-ministration officials say that primarily meansimproving the access of autos and beef in theKorean market. “Overall, I think it’s a potentialgood deal for U.S. exporters, but there’s certainsectors of the economy that aren’t dealt with aseffectively, and that’s something I’m going to betalking to President Lee about,” said PresidentObama last fall.
The administration hopes to wrap up out-standing issues by the next G20 meeting set forNovember 11–12 in Seoul, South Korea. As theG20 meeting in Toronto was drawing to a close,the president added, “I want to make sure thateverything is lined up properly by the time I visitKorea in November, and in the few months thatfollow that, I intend to present it to Congress.”
Still, the path to ratification is not clear.President Obama spoke of “adjustments” ratherthan “renegotiation” of the FTA.
Yet leadingcongressional Democrats remain opposed, indi-cating that the changes would have to be “sig-nificant” to win their support.Moreover, while negotiators for both nations will be meeting for talks, Seoul has little incen-tive to make concessions to the Obama adminis-tration. Trade liberalization remains controversialin the ROK. Two years ago President Lee cameunder sharp attack for easing restrictions onAmerican beef imports.
In July Trade MinisterKim Jong-hoon said: “Taking just one period—one comma—out of the agreement will mean acomplete revision. This will not happen.”
Hespecifically rejected changing the ROK’s policy on beef and auto imports, two key Obamaadministration demands. (Interestingly, in 2008the Bush administration refused to revisitKORUS FTA despite South Korean concernsover U.S. beef exports.
) The president must focus less on the desires of Democratic interest groups and more on the inter-ests of Americans generally. Washington shouldset as a major objective expanding Americaninvestment and trade opportunities in East Asia. The starting point should be to ratify the pendingtrade agreement with the Republic of Korea.
Expanding Export Opportunities in a Major Market
South Korea possesses one of the world’s
Washingtonshould set as a major objectiveexpanding Americaninvestment and tradeopportunities inEast Asia.