North Korea Crisis No Reason to Preserve Failed Trade Deal; U.S. Exports to South Korea Dropped, Deficit Doubled Since Pact
Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch
WASHINGTON - How to peacefully resolve North Korea’s nuclear escalation is a thorny question. The fact that 28,000 U.S. troops are stationed in Korea is just one demonstration of our nation’s support of Korea and commitment to its defense. However, what should happen with the 2012 U.S.-South Korea Free Trade Agreement is an entirely separate question that is not complicated.
Public Citizen opposed the U.S.-Korea Free Trade Agreement in 2011 when it came before Congress because we knew that any deal that has at its heart new rights and powers for corporations to offshore jobs, raise medicine prices and attack environmental, health and financial stability safeguards is bad for people and the planet. But in its five years in effect, this agreement has proved even worse than expected.
U.S. exports to Korea actually declined after the pact was implemented. And, like most U.S. FTAs, imports into the United States soared. The unique outcome of the U.S.-Korea FTA: The U.S. trade deficit with Korea doubled in five years. U.S. average monthly exports to Korea have fallen in 10 of the 15 U.S. sectors that export the most to Korea, relative to the year before the FTA. Exports of machinery and computer/electronic products, collectively comprising 27 percent of U.S. exports to Korea, have fallen 20.6 and 20.1 percent respectively. U.S. exports to Korea of agricultural goods have even fallen 5.4 percent in the first five years of the FTA.
And as economist Dean Baker notes, sometimes those bilateral balances do matter.
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