Monday, November 2, 2009

Bizarro Competitive Liberalization, ctd.

According to Reuters, there's a twitch of life coming from the comatose US-Korea FTA:
U.S. Trade Representative Ron Kirk will outline the Obama administration's review of a long-delayed free trade agreement with South Korea in a speech next week, a U.S. business group said on Friday....

Kirk will give his speech on Thursday evening at the U.S. Chamber of Commerce, a leading business group that has criticized Obama for failing to move forward on the agreement with South Korea and others with Colombia and Panama.

The speech will come just weeks before Obama visits South Korea at the end of an Asian tour that will also take him to Singapore for the annual summit of the Asia Pacific Economic Cooperation forum and to Shanghai and Beijing.

Obama and South Korean President Lee Myung-bak issued a joint statement when they last met in June saying they "were committed to working together to chart a way forward" for the free trade agreement, which was signed in June 2007.

South Korea's ambassador to the United States, Han Duk-soo, said this month that Seoul hopes the upcoming summit will be a catalyst for action on the long-stalled agreement.

Just two weeks ago, the European Union signed its own free trade agreement with South Korea that is expected to take force by the middle of 2010.

White House deputy national security adviser Michael Froman said this week the Obama administration viewed the EU-South Korea deal with interest but declined to say whether it made it more urgent for the United States to approve its own pact.

Although most mainstream U.S. business and farm groups support the agreement, it faces strong opposition from labor groups and two of the big three U.S. automakers.

The United Auto Workers, Ford and Chrysler say the agreement fails to tear down non-tariff barriers that keep out American cars while eliminating the few remaining tariffs the United States still has on South Korean cars.
On September 15, 2009, USTR received about 300 solicited comments on the KORUS FTA, and about two weeks later, Assistant USTR Wendy Cutler stated in no uncertain terms that there was absolutely no timeframe for US consideration and passage of KORUS: ""All our efforts are really to understand concerns and figure out how the concerns can be timely addressed. There is no timeline assigned to this, but I can assure you that we are working intensively."  Now, about 6 weeks after those 300 comments were dumped on USTR's doorstep, and about a month after Cutler called "no timeline," USTR Kirk is prepared to announce the results of the administration's review of multi-billion dollar trade agreement.

So what's going on here?  Has the White House been pressured into accelerating KORUS due to increased pressure from business groups (and some public embarrassment) now that the EU-Korea is complete, or are they just buying time with another lukewarm and empty statement of support?  At this point, no one really knows for sure, but if Kirk announces next week that the administration will soon try to move KORUS through Congress - despite the vocal opposition of Ford, Chrysler and the UAW - it will certainly appear that "bizarro competitive liberalization" has indeed become a reality, and that America's trading partners will have dragged it, kicking and screaming, back into the free trade game.  The tables will have officially turned.

As I said yesterday, I highly doubt that this will be the case, and instead expect more stalling by the White House.  But if I'm wrong, it's good and bad news.  The good: any free trade movement in the US is a good thing these days.  The bad: it's a depressing state of affairs that said movement will have arisen out of fear (of losing overseas market share) and embarrassment, rather than an earnest and public desire to liberalize trade and better the lives of a vast majority of American citizens.

Stay tuned.

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