It's somewhat consoling to me that I'm not the only American adamantly opposed to FTAs and their toxic affects on jobs and US sovereignty. It's also somewhat consoling that members of both parties of reps and dems, as well the independent party, which I recently joined, agree with my outlook on the poisonous nature of FTAs and membership in the WTO.
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The Korea-US Free Trade Agreement (KORUS) was passed by the overwhelming majority of both parties in both houses of Congress. Signed by President Obama, the White House promised Americans more jobs and increased exports, in spite of several economic studies that showed the deal would actually cost American jobs. Even the administration's own proposal promised an increase in the trade deficit.
It hasn't taken long to see that the critics of this agreement were right.
The agreement went into effect in March 2012. The trade deficit with South Korea nearly tripled in one month to $1.8 billion. That month also showed a $700 million increase from April of 2011. May 2012 saw an additional increase. The first two months showed a 63 percent increase in our trade deficit over the previous year. Our exports actually fell by 12 percent in the first month; exactly the opposite of what we were told would happen by our leaders.
This year has shown a continued trend of growing deficits. Several months of trade data since the implementation of KORUS are available from the Census Bureau. In each month our trade deficit with South Korea has grown. August 2012 is particularly striking, as our trade deficit more than doubled from the year before - $737 million to $1.59 billion.
Our annual trade deficit under the KORUS FTA is and will continue to be much higher than prior to this misguided agreement. Our leaders, many under pressure from the sponsors who fund their campaigns, want us to believe what they tell us, not what we see.
We say we have a "free trade" agreement with South Korea, as if that is suppose to be a good thing, but the KORUS FTA is actually stacked against us.
It is true that the KORUS FTA did eliminate some tariffs on American goods, but everything we export is still subject to South Korea's 10 percent value-added tax (VAT). Korea's domestic manufacturers can receive rebates for the VAT they pay; American producers have no choice. The VAT makes American goods more expensive and less appealing to South Korean consumers. Every major industrialized country uses a VAT except the United States. Every time we enter into a new free trade agreement we are entering into a situation where American producers are at an undeniable tax disadvantage.
Our domestic auto industry is one area that will almost certainly see adverse effects from this agreement. While the KORUS FTA is supposedly a "free" trade agreement, American automakers will continue to get limited access to the small South Korean market, while South Korean manufacturers enjoy full and open access to our large auto market.
The Overwhelming Lopsided Difference
U.S./Korean Vehicle Trade Flow Prior to the South Korean Agreement
2006
2007
2008
2009
2010
They Shipped Us
695,134
674,710
615,853
476,857
515,646
We Shipped Them
5,732
12,510
13,654
7,663
15651
The most we have shipped to them in any one year was 15,651 - yet the deal gives South Korea unfettered access to the U.S. car-buying market. In the last five years South Korea has shipped us an average of 595,640 cars per year. In that same time, we've shipped them an average of 11,022 cars per year. That is a 54-to-1 negative ratio, and it will now dramatically increase.
The United States needs to recognize that the free trade agreements we sign benefit only a small minority of wealthy individuals. They reap the benefits by outsourcing our manufacturing and making huge profits from cheap exported labor, while other Americans lose their jobs. Our government continues to push these agreements despite the fact that they are bad for our country.
To Pull Ourselves out of this irresponsible, downward economic spiral we must recognize what harm this is doing to us and immediately cancel this and all other disastrous "free trade" agreements. Send this to your Representative, ask what they will do about it!
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jomoco
