Thursday, September 23, 2010

ROK-US trade by the numbers

I felt compelled to respond to this comment at The Marmot's Hole because it seems to encapsulate so neatly the angst and hair-pulling of the Korea-bashing anti-FTA crowd, those that call Korea a free-rider and insist that an FTA would make things even worse.

Indeed, Weikuboy seems to have fallen for "the big lie."
Lawyer the truth all you want, calling Daewoo cars built in Korea in the past couple of years “American” and Hyundai cars built in the U.S. in the past couple of years “American”.
No, it's a matter of fairness and accurate comparisons. The Korea-bashing crowd has been having their cake and eating it, too, by perpetuating a distorted picture of outlandishly lopsided automobile trade deficits that count US-made Hyundais and Kias as "Korean" while also counting Korea-made General Motors vehicles as "Korean." (Perhaps if GM really does rebrand Daewoo as Chevrolet, then this anti-FTA sleight of hand will be more glaring.)

Moreover, though this is not a point made by Weikuboy himself but another knee-jerk serial Korea basher, the Korean car market is only one-sixth that of the US, so even if there were true parity among consumers' car-buying decisions, US automakers would sell to Korean consumers only one-sixth the number of cars that Korean automakers sell to American consumers.

And then there's this:
... Americans have a growing sense of being deeply wronged by Korea and its neighbors. And as long as the U.S. continues to run an obscene trade deficit with that part of the world...
Korea and its neighbors? That part of the world? I think WeikuBoy is conflating some very different countries, so let's look at real data from 2009:
And again, if the free trade numbers are so bad because of barriers, shouldn't the goal be to enact an FTA to take down those barriers as much as possible and make the numbers better? Surely the KORUS FTA is not perfect, but it seems a far sight better than nothing, and it would be easier to fine-tune an agreement that has already been signed and has mechanisms for being tweaked than to go back to the drawing board and start over completely.

But I doubt there will be any convincing of Weikuboy:
The closed markets of China, Japan, and Korea, especially, have been taken unfair advantage of the U.S. year after year, decade after decade.
Decade after decade? Especially Korea? Well, not quite:
Although bilateral trade between Korea and the United States grew tremendously in size, until 1981 the bilateral trade balance was persistently—with the exception of 1978—in favor of the United States. It shifted into Korea’s favor beginning in 1982 and has since grown significantly, reaching a peak at $8.96 billion in 2002. Korea showed a trade deficit with the United States in 1991 and 1992 and also from 1994 until 1997, but has maintained a surplus since the economic crisis of 1997.
But of course, you knew that, even though you continue to rant about "one-way trade."

You can see more data at this Census Bureau site (which disagrees with the above quote a bit by showing a slight surplus for Korea in 1991 and 1994). The upshot, though, is that Korea has not been a free rider and its surpluses in trade, particularly lately, are not astronomical. Unlike its neighbors, particularly China.

It's unwise to mix up China and Korea, or even Japan and Korea in this regard, especially if it is going to lead you to shoot yourself in the foot by not supporting a barrier-reducing, trade-enhancing, jobs-creating FTA.

Oh, and let's step up US trade with Taiwan, please. It's only one-seventh what it is with South Korea (Taiwan's population is half that of South Korea), and that's not right.

Note: This post is a work in progress that I may amend as time goes on.

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