Reports from the Economic Front

a blog by Marty Hart-Landsberg

Say No To The U.S-South Korea FTA

Christine Ahn and I have just published a piece at Foreign Policy in Focus on the signed, but not ratified, U.S.-South Korea Free Trade Agreement (FTA).  We argue for rejecting the agreement.  

Forget the FTA Fix, Just Say No

The free trade push has begun again. Both U.S. President Barack Obama and South Korean President Lee Myung-bak are calling for ratification of the U.S.-Korea Free Trade Agreement, which was signed by the two countries’ trade representatives in April 2007 but has yet to be approved by either the U.S. Congress or the South Korean parliament. Aware of how unpopular the agreement remains, President Obama wants the U.S. Congress to delay the approval vote until after the mid-term elections in early November but before the mid-November G-20 meeting in Seoul.

The Great Recession has left the U.S. economy in a mess. Slowly but surely people are coming to understand that we are in this mess because of a number of inter-related trends, all driven by increasingly unchecked corporate power: wage suppression, deregulation and globalization of production, and financialization.

It is therefore dismaying to hear President Obama announce that the U.S.-Korea Free Trade Agreement, which is designed to further enhance corporate power, will somehow “create new jobs and opportunity for people in both our countries.”

. . . .  

The entire piece can be read here.

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2 responses to “Say No To The U.S-South Korea FTA

  1. Jamie Partridge October 13, 2010 at 3:59 pm

    Marty – It was great to hear you on KBOO Monday morning. The question of tariffs keeps coming up among progressives. The leadership of the labor movement and commentators like Thomm Hartmann see tariffs as the key to rebuilding US manufacturing. What’s your take?

    Like

  2. Martin Hart-Landsberg October 14, 2010 at 7:45 pm

    Thanks, Jamie. Here is my response to your question:

    Tariffs are important, but only as part of a bigger package. For example, in the late 1980s, the US government successfully pushed up the value of the Japanese yen in an attempt to help US automakers in their competition with Japanese automakers. The government thought that the appreciation of the yen would push up the cost of Japanese cars in the US, giving US automakers an opportunity to expand domestic market share and rebuild profits.

    But, what did the US automakers do—they just raised their prices. The result was higher profits for the US automakers but no modernization of the US auto industry.

    Raising tariffs would be no different. It would allow US based companies to boost their profits while doing nothing to force them to undertake needed investments and restructuring.

    We might well want to employ an active tariff policy, but for it to be useful it would have to be coupled with a meaningful industrial strategy designed to transform our economy along radically new lines.

    Like

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