Spur economy by opening trade with S. Korea - East Valley Tribune: Opinion

Spur economy by opening trade with S. Korea

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Posted: Friday, January 22, 2010 4:53 pm | Updated: 3:23 am, Sat Oct 8, 2011.

Tom Patterson: You want more jobs? I'll show you the jobs. There's a way to create 345,000 new jobs, according to the U.S. Chamber of Commerce, that doesn't require government spending or increase the debt. Simply implement the free trade agreement that has already been negotiated with South Korea.

You want more jobs? I'll show you the jobs. There's a way to create 345,000 new jobs, according to the U.S. Chamber of Commerce, that doesn't require government spending or increase the debt. Simply implement the free trade agreement that has already been negotiated with South Korea.

Since trade issues don't grab a lot of headlines, here's the background. The Bush administration negotiated a trade agreement with South Korea, but Congress never ratified it. Now the Obama administration, while paying lip service to free trade, continues to hold the package hostage because of blow-back from the highly unionized automobile industry.

Even though they complain about an uneven playing field with South Korea for autos, they are strangely hostile to the solution of the problem. The ironclad rule in Washington today is that whatever the unions want that the administration can provide, they get.

The good thing about the jobs that trade would create is that they would be real, private sector, wealth-creating jobs, not the government jobs that have been the only benefit of the "stimulus" package passed last year. These jobs would add at least $10 billion to our gross domestic product and raise U.S. exports by $35 billion, unlike the government jobs that just soak up taxpayer money.

Still, the Obama administration claims to be doing a good job with trade issues. U.S. Trade Representative Ron Kirk told Asians protesting our trade policies during Obama's China visit that the U.S. is "the most open market in the world." The hosts must have gotten a good laugh out of that one.

According to the Economic Freedom of the World Report, the U.S. is well out of the competition for most open economy. In fact, we had fallen to 28th in last year's ranking, which included tariffs, regulatory barriers and capital controls, among other factors.

Meanwhile, around the world, free trade is blossoming. Asia's Tigers - the Association of Southeast Asian Nations - this year formed the world's third-largest free trade area. They have already signed trade agreements worth hundreds of billion of dollars worldwide, including a blockbuster deal with China that scrapped more than 7,000 tariffs to create $200 billion of trading activity serving a third of the world's population.

The European Union is also plunging ahead with 29 trade deals, while the U.S. has been involved in only five of the 64 trade pacts done since 2005. The EU, for example, took basically the same deal we spurned with South Korea, tearing down tariffs and excessive regulation, while giving Europeans access to the world's 13th-largest economy.

Elsewhere, Canada has a trade agreement with Colombia that eliminates the 12 percent tariff on Canadian nonagricultural exports that American producers still pay. Moreover, Canadian farmers are able to export their products tariff-free while U.S. farmers continue to pay tariffs up to 80 percent on exports to Colombia. We could have had that deal, too, but congressional lefties nixed it over objections to Colombia's domestic policies. That'll teach 'em.

Obama's problem is that much of his Democratic base is wedded to the protectionist past. Sen. Byron Dorgan of North Dakota spoke for many when he endorsed Obama early in his presidential campaign partly because Obama "has always opposed NAFTA (the free trade agreement with our North American neighbors)." And labor unions, to whom Obama is deeply indebted, are adamantly opposed to any measure that decreases union membership, no matter how much it benefits all of us.

So while economic cooperation flourishes worldwide, the Obama administration has signed no trade agreements, putting its energy instead into trade wars with China and actually enacting new tariffs on steel, tires, nylon and other products.

But they may be playing with fire on this one. Even those who still believe President Franklin Roosevelt did a bang-up job managing the Great Depression understand that the Smoot-Hawley tariff played a major role in creating the longest, deepest economic downturn in our history. A credit crisis, record-high government spending, massive public debt and uncertainty have buffeted the American economy. We can't afford more sources of systemic weakness. It's time to get with the program on free trade.

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East Valley resident Tom Patterson (pattersontomc@cox.net) is a retired emergency room physician and former state senator.

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