I've heard different things about revisiting the South Korea freed-trade agreement negotiated by the Bush administration but left languishing without authority since. The Obama team is looking to finish the job, sorting out remaining, industry-specific issues and pushing for ratification of the deal. Skeptics in Congress and outside government seem reluctant to believe that the administration can get the political traction to move the process along. It's safe to say the White House sees the project fitting neatly into its plan to encourage export growth and orient the American economy toward the Pacific. Perhaps more important, they hope to nab some Republican votes on the deal if GOP strength in Congress increases, as expected after the fall election. The crux of the bargain:
The agreement would eventually eliminate tariffs between the two countries. Because those levies are typically higher on the South Korean side, 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. South Koreans say they would benefit from lower prices -- some tariffs on food imports from the U.S. are as high as 40 percent -- and a more efficient flow of investment in and out of their country.
Many Democrats are reluctant to back the deal, saying it doesn't do enough to protect American jobs, and want to see changes that demonstrate Obama's commitment to approaching trade in a way that's different from Bill Clinton and George W. Bush's approaches. At the same time, the U.S. is under pressure to compete with other countries that are already liberalizing trade with the economically powerful Asian nation. The administration is also trying to do everything possible to push recovery forward. Reconciling those competing impulses will be difficult, to say the least, but given how little on the legislative agenda seems feasible, look for this deal to gain more attention in the coming months.
-- Tim Fernholz
