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October, 15th 2009

EU signs free trade pact with Korea

– Liz Mair

Via the NY Times:

The European Union and South Korea took a major step Thursday toward a free trade deal aimed at generating billions of euros in new trade flows.

With the global trade talks deadlocked and amid concerns over a rise in protectionism, analysts said that the deal could send a powerful signal to other nations, including the United States, to press ahead with their own bilateral pacts.

[...]

Joseph Francois, a fellow at the Center for Economic Policy Research and professor of Economics at Johannes Kepler University in Linz, Austria, said that the deal sent an important message.

“It might get the U.S. moving,” he said, “if everyone else is starting signing agreements and they are not — if they feel that, with Canada and the E.U. doing that, it puts U.S. firms at a disadvantage.”

A free trade agreement between the United States and South Korea, reached in 2007, has yet to be ratified and is stuck in Congress, with some American politicians opposing an agreement for fear that it would be detrimental to automakers.

* Sigh. *

I understand that not everyone loves free trade.  There are certainly areas of this country, and Michigan and Ohio would be such places, where the view that free trade has hurt America and destroyed jobs is prevalent.  There is certainly also plenty of evidence (as anyone who regularly reads the Economist, the FT, the Wall Street Journal, or anything much out of the CATO Institute knows) to suggest that free trade is, in fact, a net benefit to the US economy.  It's abundantly clear to those of us who live in/come from states like Washington, California, New York and Texas, that free trade is actually critical to our environs/those from which we originally hailed.  Free trade with Korea, specifically, would no doubt be a boon to Washington State, where I was born and raised, with trade with all of Asia being a significant contributor to our local economy and with Korea being a notoriously closed market that could be opened via the ratification of the FTA already negotiated between the US and Korea, on which (as the NYT notes) the Democratic Congress refuses to act.  I am confident that this EU-Korea pact, if ratified, will be a boon to the EU.

So, the Scot in me says hurrah.  But the American in me says boo to our elected leaders for failing to recognize a good opportunity when they see one, as the EU has done here.

It all makes me pine for the Clinton years... [intro]

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