President Bush recently rolled out the welcome mat for South Korea’s newly-elected President Lee Myung Bak in his first presidential trip to the US with a two-day summit at Camp David. The trip was historic because it marked the first time a South Korean leader has been invited to the exclusive presidential retreat.
Congress can and should match the president’s historic gesture by bringing forward a vote on the landmark US Korea Free Trade Agreement. Every American business- from apple farmers to Apple computers- will benefit from this trade agreement’s elimination of tariffs, expansion of market access, and enhancement of intellectual property rights.
According to a report from the International Trade Commission, the US Korea FTA could boost our country’s GDP by nearly $12 billion, grant American companies unprecedented access to South Korea’s trillion dollar economy, and eliminate 95% of Korean and American tariffs within three years.
Free trade stabilizes domestic economies and improves diplomatic relations, but its biggest beneficiary is always the consumer. Open markets and fewer tariffs mean more choices, better products, and lower prices for consumers. In 2005, the United States and Korea exchanged $71 billion in goods and services, yet only 38% of American and 13% of Korean tariff lines were duty free.
That means consumers paid artificially higher prices on products- just for the privilege of importing them from abroad. Within ten years, the US Korea FTA will eliminate 99% of US tariff lines and consequently lower costs for consumers.
More importantly, this economic win for consumers is not predicated on a loss for American businesses. US companies, especially American farmers, will have greater export opportunities. One half of all US farm exports, including agricultural heavyweights like wheat, corn, soybeans and cotton, immediately become duty free under this agreement.
America’s agricultural industry is not the only sector to see immediate economic benefits. American technology and entertainment companies increasingly face challenges of copyright infringement and anemic international intellectual property rights. For the entertainment industry, this agreement creates a set of intellectual property rights for trademarks, copyrights and patents that are consistent with American standards. Additionally, the agreement provides for better coordination and enforcement of civil, criminal, and customs investigations into illegal copies of intellectual property.
The importance of South Korea’s economic, military and cultural alliance with the United States cannot be overstated. Economically, America must respond to the increasing number of trade deals signed by China and the European Union throughout Asia and the Middle East. Militarily, Kim Jong Il’s persistent nuclear posturing and potential involvement in arms trading with terrorists requires our country to maintain a presence in East Asia.
Culturally, 600,000 Korean Americans live in the Los Angeles area, making it the largest population of Koreans outside of Korea. In 2006, South Korea was our seventh largest trading partner; 18,000 US companies currently do business in Korea. Free trade agreements, like this one, foster a better relationship between countries and create an economic link between our people.
So what’s the hold up? The agreement’s strongest opposition comes from US automakers who are afraid of greater competition and demand a guaranteed share of the Korean auto market.
US automakers will benefit from this trade deal with or without market share mandates. Last year, US automakers exported a meager 5,000 cars to South Korea. To put that number into perspective, E-bay sells more cars online in a week than US automakers combined to sell in South Korea last year. Do US automakers have anywhere to go but up?
Congressional Democrats must end their political pandering to Detroit’s big automakers and labor unions. Short-sighted economic isolationism shields unimaginative businesses from competition and puts American jobs in jeopardy.