Obama Believes its Time to Pass the US- Korea FTA. We Concur.

Since taking office, President Obama’s trade agenda has been anything but. With continuous pandering to protectionist allies (see here, here, and here), Obama has done more to halt international commerce, than open up new markets by enacting the trade liberalizing policies that would boost domestic exports, create jobs, and lead to higher economic growth. However, over the weekend the White House signaled a shift as the Administration announced it would move forward on the stalled U.S. – Korea Free Trade Agreement. The draft agreement was negotiated in 2007, however under the leadership of anti-trade Democrats, the agreement as not gone up for a vote in the House.

Today, South Korea is the world’s 10th-largest economy and America’s seventh-largest trading partner. The US-Korea FTA would abolish 95 percent of tariffs on all industrial and consumer goods within three years, and remove most of the lingering 5 percent within a decade. Since tariffs and trade barriers amount to government-imposed costs on both companies and consumers, eliminating these barriers in a free trade agreement amounts to a significant tax cut for both countries. Additionally, the U.S. International Trade Commission estimates that enacting the FTA would increase U.S. exports by $10–11.9 billion. The gains brought to the U.S. by enacting pro trade policies is apparently something the Obama Administration now understands (it only took three years).

The push for enacting the US-Korea FTA comes nearly a month after a group of thirty nine members of Congress from both parties sent a letter urging the Administration to move forward on another agreement, the US-Colombia FTA. And don't even forget about the third agreement in waiting, the US-Panama FTA.

President Obama claims to be a supporter of free trade, saying it is vital to the economic health of our nation and he has repeatedly called for countries to avoid protectionism. Hopefully, the announcement over the weekend indicates a change in the way this Administration views trade– as less of a political tool and more a tool for economic growth and expansion.