Failure to Sign a South Korean Free Trade Deal Is a Victory For U.S. Business

Guest blog post by Secretary of Commerce, Gary Locke.This week, I’m visiting the Republic of Korea, one of the United States’ closest allies in the world, and one of our most important trading partners.  Last December, President Obama signed a landmark trade deal with Korea that could boost annual exports of American goods to Korea by up to $11 billion, supporting at least 70,000 U.S. jobs. But the deal still needs to pass Congress, which is why this week, I’m leading four Members of Congress on a fact-finding mission that will demonstrate firsthand how this trade deal will lead directly to more sales of American goods and services abroad and more American jobs here at home. Korean and U.S. businesses are already collaborating, innovating and trading together like never before.  This week, members of our delegation – which includes Representatives Dave Reichert and Jim McDermott from my home state of Washington and Representatives Joseph Crowley and Charles Rangel from New York – are getting to see this up close. Tomorrow, we visit Pantech, one of Korea’s largest mobile phone makers, and a major buyer of U.S. technology. 

Today Secretary Gary Locke and the congressional delegation concluded their three-day trip to Seoul with a visit to the Demilitarized Zone – the border between South and North Korea – and a lunch with U.S troops and their families at Yongsan Garrison to thank them for their service. The group also met with leaders of South Korea’s Democratic Party and Grand National Party at Korea’s National Assembly to discuss the U.S.-South Korea Trade Agreement (KORUS). “Over the last few days we have had the opportunity to see first-hand the benefits that KORUS will bring to the economies of both the U.S. and Korea,” Locke said. “There is great demand for U.S. products -- from made-in-America cell phone components to life-saving medical equipment. This agreement will increase mutually beneficial trade, strengthen our economies and create jobs in both of our countries.” Locke also visited Seoul National University Hospital for a demonstration of Varian Medical Systems’ (Palo Alto, Calif.) advanced radiotherapy technology.  Varian is the world leader in this life-saving, cancer treatment technology with approximately $34 million worth of annual sales to South Korea.  Their equipment is manufactured in California and Utah and exported globally. Under the U.S.-South Korea trade agreement, the tariff on Varian’s products would be eliminated, making the company more competitive in the Korean market. 

The US trade community, including your humble correspondent, was shocked to wake up this morning to the utterly insane and depressing news that President Obama and Korean President Lee Myun Bak have failed to reach a final agreement on the US-Korea FTA that would have cleared the way for the White House to send the agreement - completed and signed in 2007 - to congress for an up-or-down vote in 2011:

ETF Database submits: South Korean equities have been in focus as of late but for all the wrong reasons; rising tensions with the often volatile North finally bubbled over earlier this year as the communist regime shelled an island of their long-time South Korean rival. The South Koreans responded in kind, launching mortars of their own while scrambling jets in preparation for any further escalation.

Dylan Matthews is writing Wonkbook while Ezra is on vacation. The Obama administration is launching a renewed lobbying effort behind the South Korea free trade agreement. Meanwhile, Obama and Education Secretary Arne Duncan are reaching out to teachers unions after months of acrimony. And despite widespread opposition and imminent EPA regulation, the construction of old-style coal plants shows no signs of abating. It's Monday. Welcome to Wonkbook. Top Stories

I've frequently lamented the attempts of many advocates of trade liberalization and FTAs to champion free trade policies through an exports-only, essentially mercantilist, approach.  Tonight's State of the Union Address - and protectionists' responses to it - perfectly demonstrate why my angst is well-deserved and why free trade proponents in Congress, the White House and the US business community need to ditch the mercantilism and adopt a new sales pitch.