The International Olympic Committee is the latest entity to jump on this economic bandwagon, having selected the South Korean resort of Pyeongchang as the host city for the 2018 Winter Olympics. The decision means the Koreans will invest as much as $6 billion on infrastructure over the next seven years and another $1.5 billion on the games themselves.
Just a few days before this announcement, a trade agreement between Korea and the European Union took effect. It wiped out 70 percent of tariffs, rising to almost 99 percent within five years. The Europeans already sell more than $90 billion to the booming Korean market each year. Now they’ll sell even more, as Korean prosperity continues to rise and the Olympic spending-spree hits its stride.
Much of Europe’s gain will come at the expense of the United States, which at the moment sells about as much to Korea as the Europeans do. Yet our goods and services will continue to face high tariffs, putting us at a severe disadvantage against our competition.
How strange that just as South Korea scores the Winter Olympics, we’re choosing to freeze ourselves out of a great economic opportunity.
There’s a simple way to fix the problem: Congress must approve the U.S.-Korea Free Trade Agreement.
This action is long overdue. Our diplomats actually concluded a trade agreement with the Koreans in the spring of 2007, a month before the Europeans even began their own negotiations. Yet for more than four years, we’ve delayed final approval, like skiers waiting in line at the top of a crowded hill.
It turns out that the rest of the world refused to join us in standing still. When the EU-Korea trade agreement went into force on July 1, the Associated Press called it “a come-from-behind victory of sorts for the EU over the United States.”
In other words, the United States had positioned itself to go for the gold. Now it has forfeited this chance and is struggling for a place on the podium.
Cho Yang-ho, who led the Korean effort to secure the Winter Olympics, said the Pyeongchang decision would “expand winter sports to new regions of the world.”
Likewise, approval of the U.S.-Korea trade agreement would expand business opportunities for Americans in Korea. It would increase U.S. exports by about $11 billion per year–an important boost if the United States is to make good on President Obama’s goal of doubling exports by 2015. It would be welcome news for a stumbling U.S. economy as well. Last week, the unemployment rate inched up to 9.2 percent.
Americans need all of the work they can get. Improved access to nearly 50 million South Korean consumers would help.
The politics shouldn’t be difficult. The president says he wants this deal. Democrats in the Senate say they want this deal and last week they passed it out of the appropriate committee. Republicans in the House of Representative say they want this deal and last week they also passed it out of the appropriate committee.
And still Washington can’t seem to get it done.
These professional partisans are now battling over Trade Adjustment Assistance, a program that means to help workers displaced by foreign competition. Obama and congressional Democrats vow that TAA must be a part of any trade package. Congressional Republicans object, insisting that a debt-ridden federal government must turn off the spending spigot.
I’m not going to get into the nitty-gritty of legislative horse-trading. That’s the politicians’ job, not mine. In all of the wheeling and dealing over spending and taxes and the debt ceiling, however, our elected officials in Washington ought to be able to come together on a trade agreement that they all claim to want.
Success will require political leadership, which ultimately must come from the White House. Obama famously failed to bring the Olympics to Chicago. Yet if he can shepherd the Korea trade agreement through Congress, along with a couple of smaller but nevertheless important pacts involving Colombia and Panama, he’ll possibly go on to earn a gold medal in job creation.
Tim Burrack raises corn and soybeans on a NE Iowa family farm. Tim volunteers as a Board Member of Truth About Trade and Technology. http://www.truthabouttrade.org