The Asia edition of the Wall Street Journal rips Barack Obama’s efforts to block the US-South Korea free-trade agreement today. The editors openly wonder whether Obama has bothered to read the agreement, noting that he seems ignorant of several of its provisions, as well as lacking understanding of the benefit to American consumers and manufacturers. They conclude that Obama is “the most protectionist U.S. presidential candidate in decades”:
Here’s one “change” presidential candidate Barack Obama apparently believes in: higher prices. Witness his letter last week urging President George W. Bush not to submit the U.S.-South Korea free-trade agreement to Congress for ratification.
Mr. Obama’s objection, as stated in his letter, is that the deal “would give Korean exports essentially unfettered access to the U.S. market and would eliminate our best opportunity for obtaining genuinely reciprocal market access in one of the world’s largest economies.” In other words, ordinary American consumers would get too good a deal.
Except that the agreement actually does require reciprocity. The removal of tariffs on automobiles, which Obama specifies in his letter, is contingent on Seoul not just removing their own tariffs (three times higher than ours) but also dismantling its protectionist “safety” requirements. Failure to comply with both would result in a reimposition of American tariffs on goods from South Korea.
The net result of the free-trade agreement is lower prices in the US for South Korean goods, and a free market for American manufacturers to enter in South Korea. Despite Obama’s populist rhetoric during this campaign, free market agreements with responsible democracies result in economic growth for both partners. While the agreements with China may need further review, those treaties with other democracies have boosted jobs and growth here and abroad.
Obama’s protectionism is exactly the wrong prescription for a nation concerned about economic growth and stability. We need to open markets to American goods, and the only way to do that effectively is to reduce and eliminate trade barriers with our allies. In Colombia and South Korea, we can create those markets and grow jobs domestically as a result. Obama wants to follow the Herbert Hoover path and return to Smoot-Hawley protectionism.