Saturday, February 05, 2011
More Free Trade Follies
It’s been more than three years since the Bush administration signed a trade agreement with South Korea. And for more than three years Congress has been balking at it. To overcome that opposition, the Obama administration got Seoul to improve the terms for American carmakers. Capitol Hill seemed happy — until it wasn’t.
The agreement is the nation’s most significant trade pact since the North American Free Trade Agreement and decidedly good for the United States. It would cement relations with an important ally in a dangerous region and boost American exports by at least $10 billion a year. Unfortunately, some powerful members of Congress, from both parties, seem more concerned about politics and narrow parochial interests.
The House speaker, John Boehner, is now suggesting that the South Korea deal must be passed “in tandem” with long-delayed trade agreements with Colombia and Panama. Those two deals face fiercer resistance from trade-wary Democrats. And it is hard not to suspect that Mr. Boehner is more interested in embarrassing the White House than using the South Korea deal to leverage the other two deals through.
Meanwhile, in the Senate, Max Baucus, the chairman of the Finance Committee, which handles issues related to trade, said he remains opposed to the South Korean pact because it doesn’t go far enough to open its beef market — an issue near and dear to his constituents in Montana. He is demanding that South Korea drop its ban on beef from cattle older than 30 months, imposed after a scare over mad cow disease in the United States.
Mr. Baucus warns that if the United States accepts South Korea’s 30-month cutoff, other importers in the region, like China, Japan or Taiwan, could, too. Still, he is doing no favors to American cattle ranchers, whose exports to South Korea are soaring. The pact would cut tariffs on most beef by 40 percent, which would save them hundreds of millions of dollars.
President Obama needs to push the deal forward and argue its case with Mr. Boehner and Mr. Baucus. This shouldn’t be that hard. The business community, an important Republican constituency, does not want the South Korean pact put at risk. And while Mr. Baucus may want to get more for the beef industry, if he pushes too hard, the industry, and the whole country, will lose out.
While he is on the subject, Mr. Obama should be gearing up to push Democrats to pass the Colombian and Panamanian agreements. They are also very good for the United States. ◦
Posted by ProfAHK at 8:36 AM