Thursday, January 15, 2009

Democrats say they will go through with Bush's free-trade agreements

Democrats are saying that they will push for passage of FTAs (free-trade agreements) negotiated by the Bush Administration, but that they want some assurances or changes. 

Regarding the Colombia-US FTA, it's a matter of ensuring protection of labor leaders. As for the Korea-US FTA, of which I am a supporter, the big sticking point is cars. That's no surprise if you've listened to Obama's campaign speeches, where he counts American-made Hyundai and Kia vehicles as "Korean" cars, but also counts Korea-made GM vehicles as "Korean."

From the article:
In the case of South Korea, the main roadblock was the Bush administration's unwillingness to change auto provisions that many Democrats believe favor South Korea's automakers, Rangel said.

"If they fought as hard for cars, as they did for beef, we wouldn't have that problem," Rangel said, referring to the strong pressure the Bush administration has put on South Korea to open its market to U.S. beef.

Secretary of State-designate Hillary Clinton has answered Senate Foreign Relations Committee questions by stating that she sees a need to "renegotiate provisions of the pacts covering trade in autos and other manufactured goods." I can't help but wonder how much the expat peanut gallery would howl if it were the Korean side trying to renegotiate. 

Again, from the article:

"Because the FTA (free trade agreement) gives South Korean auto exports essentially untrammeled access to the U.S. market, ratification of the agreement in its present form would mean the United States would lose its remaining leverage to counteract" South Korea's non-tariff barriers that keep out U.S. automobiles, Clinton said.
I wonder which non-tariff barriers she means? Detroit's lobbyists seem to keep harping on things such as audits of people who buy foreign cars, something that the government threatened fifteen years ago but hasn't been an issue since the Clinton administration. Is that what they're referring to?

Obama and the Democratic congress should realize that Japanese and German automakers are doing much better. It is the Americans who are languishing, and that's because they are producing oversized cars that don't fit very well with a population that drives on narrow roads where gasoline is some $7/gallon. 

Maybe, just maybe, the problem lies with Detroit, not Seoul. Or is the public's unwillingness to buy Hummers an example of a non-tariff trade barrier. 

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