The first year of results are in for the U.S.-Korea Free Trade Agreement (FTA), and it's grim. U.S. exports to Korea plunged 10 percent under the FTA and the trade deficit jumped 37 percent. That equates to the loss of tens of thousands of U.S. jobs.
Yikes, what does President Obama do, given this unfortunate revelation occurred the day before the high-profile Washington visit of Korea's president, when Congress and the press would be focused on all things Korea?
He announces: "On our side, we're selling more exports to Korea." Holy Pinocchio!
Not exactly trust-inspiring, as the administration now tries to sell the massive 11-country Trans-Pacific Partnership (TPP) FTA with the same tired promises used to persuade Congress to support the Korea FTA. That would be the promise that the Korea FTA would mean "more exports, more jobs." Right...
Sadly, the Korea FTA is not a fluke. Like the TPP, it is based on the NAFTA model. And U.S. export growth to countries with NAFTA-style pacts has been particularly lackluster; growth of U.S. exports to countries that are not FTA partners has exceeded U.S. export growth to countries that are FTA partners by 38 percent over the past decade. Yup, totally counterintuitive, to say nothing of counterproductive to the administration's manufacturing revitalization goals, but that's what the data shows.
As the Korea FTA provides fresh evidence of the job-killing nature of these deals, U.S. voters want and deserve to know why any member of Congress would buy another round of empty promises for these pacts.
It's an urgent question, because the same baloney is now being served up to Congress by the administration as it attempts to persuade Congress to delegate away its constitutional trade authority through a revival of the defamed and defunct Fast Track trade authority. That would be the Nixon-created legislative-luge-run procedure on which the administration hopes to sled TPP through Congress.
It's worth noting that the extreme Fast Track process has only been used 16 times since Nixon hatched it, although hundreds of trade agreements have been negotiated and implemented during the same period. It's the tool of choice by Democratic and Republican presidents seeking to pass "trade" agreements only Wall Street, Big Pharma and chronic-job-offshoring U.S. multinational corporations could love -- agreements like the TPP. The TPP includes generic-medicine-undermining drug patent extensions, limits on financial regulation, and special incentives to offshore U.S. jobs to, say, TPP partner Vietnam, where manufacturing wages of less than $100-$150 per month make it the lower cost offshoring alternative to China.
But, back to trade prevarication patrol: Contrary to the administration's claims of its export-expansion prowess, the steep decline in U.S. exports to Korea under the FTA contributed to an overall disappointing U.S. export performance in 2012. Forget about President Obama's pledge to double U.S. exports by the end of 2014. At the sluggish 2012 export growth rate of 2 percent, the United States would not achieve that goal until 2032, 18 years behind schedule.
What's more, the sectors the administration promised would benefit the most from the Korea FTA are actually some of the biggest losers. U.S. pork exports to Korea are down 24 percent, beef exports fell 8 percent, and poultry exports took a huge hit, plunging 41 percent under the first year of the FTA compared to the year before it was implemented.
The auto industry numbers aren't any more promising. The U.S. deficit with Korea in autos and auto parts increased 16 percent in the first year of the FTA. U.S. auto imports from Korea have surged by more than $2.5 billion under the FTA's first year, while auto exports to Korea increased by just $130 million. Nonetheless, FTA proponents have shamelessly touted "gains" in U.S. auto exports. President Obama declared: "Our automobile exports are up nearly 50 percent!" Um, it would have been a bit more honest to not use percentages, given almost any gain would look grand compared to the teeny number of U.S. cars sold in Korea in 2011 -- about 8,000. The touted increase in 2012 totaled less than 1,500 cars. This in comparison to the 1.3 million Korean-made Hyundai and Kia cars sold here last year.
In sum, the Korea FTA's outcomes have shown the perils of relying on President Obama's promises, and have undermined his job growth agenda to boot. Given the transpartisan contempt for our current trade agreements shown in repeated polls, members of Congress who buy the same sorry promises again do so at their own peril.
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