The sad news was reported this morning that there will not be a free trade agreement between the U.S. and South Korea. All foreign affairs fans should not be writing the obituary for this FTA yet because the devil is in the details. It will probably pass at some point, but just not right now. Two reasons explain why this FTA was not signed by President Obama and South Korean President Lee Myungbak. First, congress wants eased restrictions on auto exports to South Korea. Restrictions, in this sense, include fuel efficiency standards and emissions standards. Second, congress also wants ease restrictions on beef exports to South Korea.
Essentially, this FTA agreement would have eliminated, or at least, lowered tariffs on items that travel between the U.S. and South Korea. Economically, it would have boosted American exports. Unfortunately, it could hurt jobs, such as what NAFTA did. Politically, signing this FTA would increase cooperation between the two nations. I am confident that once the details are worked out this FTA will be signed. The FTA has been a priority for President Obama ever since the last FTA expired under President Bush's term. It would be a source of cooperation with Republicans and moderate Democrats.
I call this the first strike because it symbolizes a bad start to the G20. The two other goals that President Obama should try and accomplish are: convince China to raise the value of its currency and convince the other nations that the Fed's quantitative easing strategy was a good idea. Oddly enough, signing this FTA agreement was his easiest objective.
Photo Credit: Sydney Morning Herald
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