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Monday, October 24, 2016

SEOUL — In March, the United States and South Korea implemented a Free Trade Agreement that President Barack Obama touts as more significant than the last nine such agreements combined. He also said it was central to his goal of doubling American exports within five years.

I think the president suffers from irrational trade exuberance, a view reinforced by my reporting in this city of 10 million people.

This deal is likely to turn out badly for American taxpayers and workers, especially autoworkers.

The president predicted 70,000 American jobs would be created as U.S. exports to South Korea grow faster than imports.

That would be terrific for generating taxes and reducing demand for government services like food stamps, which have become the sole income for about 6 million Americans.

But — based on previous major trade deals, the details of this one and a host of Korean business and cultural barriers — I think a much more likely scenario is the destruction of more than 150,000 American jobs over the next few years, as projected by the Economic Policy Institute, a Washington research organization that advocates for low- and middle-income workers.

The president’s optimistic statements, made in December, drew on projections by the U.S. International Trade Commission. It predicted that U.S. exports to South Korea would grow at least 52 percent more than imports, creating tens of thousands of American jobs. A March update predicted that eventually exports of U.S. cars to South Korea will “likely increase significantly.”

This is the same agency that predicted that liberalized trade with China would result in a $1 billion annual trade deficit for the United States. The actual 2011 deficit: $295 billion.

And remember NAFTA? The United States ran a $1.6 billion trade surplus ($2.6 billion in today’s dollars) with Mexico in 1993, the year before NAFTA. Last year, the United States ran a $64.5 billion deficit.

The United States has consistently run trade deficits with South Korea – more than $13 billion last year, according to the U.S. Census Bureau. And, of course, the trade agreement has only been in place a few months. But it is worrisome that the deficit for April and May, after the agreement took effect, soared 63 percent compared with a year earlier.

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Copyright 2012 The National Memo
  • bcarreiro

    to the editor david: what u think and what you know are two different things : u forget that bush nailed us americans to the wall and obama has an open mind set and strategy. its ok to be cautiously optimistic not pestimistic. do they(mitts campaign) pay u to slander obama on his trade agreement.

  • Most of our trade agreements during the past 50 or 60 years have resultd in increased trade deficits and jobs losses in the USA. The main reason for that is that we can not compete effectively against nations where labor costs are sometimes one tenth of ours. Conversely, most of the trade agreements we have negotiated resulted in huge profits for our corporations. Unfortunately, those profits were, more often than not, invested overseas rather than in the USA. An example of the complicity of our government in the advancement of corporate interests, even when doing so is detrimental to the American people, took place last week when Congress rejected President Obama’s proposal to fine companies that outsource jobs overseas and reward those that invest and create jobs in the USA.

  • This is not rocket science , our legislators are amateurs , inept and border on brain dead , it is hard to believe they can authorize and embrace these one sided deals that don’t take into account the real ramifications to America’s eventual demise.

  • gottamouthoff

    That is one of my biggest hang-ups with my Democrat party. Why are we getting into all these treaties that cost us so many jobs? I know we benefit from the many products that may be imported but the trade-off in the loss of American jobs has gone way to far. We have to many unemployed to buy all those goods. Eventually the credit so many use will be way overextended and we will be in deep crap.