Saturday, November 13, 2010

KORUS Post-Mortem

In the two days following the Great KORUS Debacle of 2010, a lot of great, mostly depressing, things have been written.  Here's a nice round-up:
  • AEI's Phil Levy explains that the biggest failure of the KORUS non-announcement was the White House's "stunning, perhaps unprecedented diplomatic incompetence."  Ouch.
  • NRO's Stephen Spruiell notes one of the more ridiculous aspects of the President's last-minute demands: he wanted Korea to lower their environmental standards.  Umm, what?
  • Cato's Dan Griswold rightly points out that the President was repping the UAW, not the country, in the negotiations.  Shocking, I know.
  • The WSJ editorial board strikes a somber tone, reminding us that we shouldn't celebrate this latest Obama misstep "because a world without American leadership is a more dangerous place."  Indubitably.
  • The New York Times: Seoul Fail. (That must've killed them to write that!)
  • Heritage's Bruce Klinger notes that Obama's KORUS failure could salt the earth for other US FTA negotiations, particularly the for the TPP (which, up to Friday, was actually gaining momentum).
  • IBD helpfully advises that if Obama wants to salvage this wreckage, he should just submit the dang agreement - as originally completed and signed by BOTH nations - to Congress.   
How sad.

Anyway, the more I think about this mess, the more I'm convinced that, contrary to the conventional wisdom, the 2010 midterm "shellacking" actually harmed the Obama-Lee KORUS negotiations and may have very well ensured their demise.  (Most people, including me, assumed the GOP landslide was going to help US trade policy.)  Since the Spring of 2009 we've known that the Obama White House thinks of trade in political, rather than ideological or economic, terms (see, e.g., Section 421, Mexican Trucks, Brazilian Cotton, and, of course, the stalled Colombia/Panama/Korea FTAs).  Well, after the 2010 midterm elections, all of the politicos have agreed that Obama's "2012 electoral victory map" just got a lot, lot more difficult, and that he thus has a far narrower margin of error in 2012 than he did back in 2008 (when the entire country seemed to be in play).  So in order to thread the electoral needle, Obama needs to be politically "perfect" for the next two years, and part of that perfection means toeing the union/rust-belt line as closely as possible (well, that's at least what he and his advisers think).  In 2012, Obama will need to win Michigan, Illinois and (probably) Ohio - states with huge UAW populations and Ford/Chrysler manufacturing operations.  He simply can't afford to anger those folks now.  So, when faced with the choice of (a) pushing ahead on KORUS without union/automaker support but jeopardizing that shrunken 2012 electoral map or (b) keeping the UAW/automakers happy by taking a ridiculously hard line on KORUS (in a very public setting) but keeping the 2012, umm, hope alive, President Obama chose (b).  

Maybe in the next several weeks US and Korean negotiators will quietly complete the KORUS negotiations, and Obama's gamble here will have paid off (politically, at least).  Maybe.  But given the President's rather consistent history on trade, perhaps we really shouldn't be too surprised that, after the 2010 shellacking, he chose politics over good policy in the KORUS talks, regardless of the near-term embarrassment that such a choice has caused him.

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