Who wants the South Korean FTA and Why?

Senate Republicans are willing to pass three leftover trade agreements from the Bush era by any means necessary, even if that means figuratively holding the president’s nominee to head the U.S. Commerce Department hostage to extract what they want. 

With former Commerce Secretary Gary Locke headed to China to become U.S. Ambassador to the Asian powerhouse, the position is currently empty, and any replacement must be confirmed by two-thirds of the Senate. 

“So important are these deals to our economy and our relations with these key allies in Latin America that, until the president submits both agreements to Congress for approval and commits to signing implementing legislation into law, we will use all the tools at our disposal to force action, including withholding support for any nominee for commerce secretary and any trade-related nominees,” the letter, signed by McConnell and 43 other GOP senators, states.  

GOP Senators want the president to move forward with “free trade” pacts negotiated with Colombia, Panama and South Korea.  

Obama has signaled his willingness to move forward with the South Korean deal, but has said more work must be done to secure the passage of the two other trade deals.  

In all of 2009, the U.S. exported just 5,878 autos to South Korea. South Korea, on the other hand, exported 476,833 autos to the U.S. 

As part of the proposed trade agreement, South Korean officials have agreed to drop or lower tariffs on some auto imports. However, non-tariff barriers that serve the same purpose as tariffs will remain. 

South Korea uses efficiency standards, high taxes and the assurance of an income tax audit to discourage the purchase of American-made automobiles. 

Opponents of the Panama deal say that it would make it much easier for American companies to set up shell corporations and avoid their tax obligations.  

It was one of just 13 countries listed on all of the major tax-haven watchdog lists that also does not have U.S. tax transparency treaties. 

A report by the U.S. Public Interest Research Group Education Fund found that the U.S. Treasury Department loses approximately $100 billion each and every year due to American businesses utilizing tax havens. 

It is unknown how much of that winds up in Panama, where 350,000 foreign subsidiaries are located in the country to take advantage of the nation’s lax tax laws, usually in the form of offshore shell companies and fake headquarters. That makes it the second most popular destination in the world for multinational corporations seeking to avoid taxes, behind only Hong Kong. 

Trade opponents have also raised concerns about labor rights abuses in Columbia. The Columbia deal is opposed by much of the Democratic caucus because of alleged violence taking place in the South American nation against trade unionists. According to reports, 470 Columbian unionists have allegedly been assassinated since 2002. 

Using past trade agreements as a model, the Economic Policy Institute projects that trade agreements with South Korea and Colombia would be very costly to the American economy. According to the study, the nation would lose 214,000 jobs by 2015, mostly well-paying manufacturing jobs. The trade deficit would rise by $16.8 billion, the study projects. 

But still, Republicans, and even some Democrats, beholden to special interests, still support these deals anyway. Even after seeing the havoc wreaked on the American economy by the North American Free Trade Agreement and the World Trade Organization, some politicians are so reliant on special interest money for their reelection campaigns that they are willing to ignore all the evidence that says increased “free trade” will not help the nation’s economy and support even more job-killing “free trade” pacts.
 
“Let’s worry about our American workers first,” Sen. Majority Leader Harry Reid (D-NV) said in response to the letter.

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