NAFTA Is Proof that KORUS Will Be Disastrous
While numerous projections show that the South Korean Free Trade Agreement (KORUS) will cost the U.S. jobs and wealth, the ultimate indicator of how harmful KORUS will be to the U.S. is the largest trade agreement we have has thus far, NAFTA.
According to Ian Fletcher, economist and author of Free Trade Doesn’t Work: What Should Replace It and Why, “Unfortunately, NAFTA is a veritable case study in failure.”
Prior to NAFTA, the U.S. had a minor trade deficit with Mexico and Canada. Now, we have a deficit totaling hundreds of billions of dollars with the two nations combined. The agreement disrupted U.S. manufacturing and caused a “giant sucking sound to the south” for jobs, as predicted by Ross Perot in 1992 at the Presidential Debate.
Millions of manufacturing jobs have been lost in the past two decades, and multinational agricultural interests took advantage of provisions in NAFTA to annihilate small-scale farming in America (more than 300,000 family farms have gone out of business).
Projections from the U.S. International Trade Commission show no net gain in jobs from KORUS, while the Economic Policy Institute projects a loss of 159,000 jobs during the first seven years of the deal. Most economists also expect the deal to further widen America’s trade deficit with South Korea. Faced with such overwhelming evidence, why has the Obama administration pushed so hard for this deal?
Many of the same sins that led to NAFTA are involved in this horrendous trade pact. First, a desire on the part of U.S. politicians to use trade as a foreign policy tool, instead of an economic issue. With Mexico, the U.S. wanted to keep pro-U.S. politicians in power in Mexico, and with KORUS we want to keep a key ally in the South Pacific. Second, there is a general ignorance on the part of our elected leaders that tariffs alone are no longer the name of the game. While our trade agreements frequently address tariffs, we have done nothing to protect ourselves from mercantilist practices such as currency manipulation, value-added taxes and dumping.
We must work to pressure and educate our elected leaders and peers of the perils of America’s trade policy. Without action to stop this ludicrous behavior on the part of our government, we threaten to fatally undermine our economic health and standard of living.