We've Heard This One Before
December 8th 2010 19:34
The Associated Press reported that the United States and South Korea reached a trade agreement that would be the “largest trade pact in more than a decade, a highly-coveted deal the Obama administration hopes will boost American exports and create tens of thousands of U.S. jobs.” (“U.S., South Korea reach free-trade deal,” Associated Press, 12/4/10).
The AP reports that South Korea is allowing the U.S. to lift the tariff on its cars exported to the U.S. in five years instead of immediately; how generous of them! U.S. auto manufacturers would be able to export 25,000 cars to South Korea as long as they meet U.S. federal safety standards (what’s the big deal about this?). South Korea exported nearly 500,000 vehicles to the U.S. market in 2009, so if all the U.S. based auto manufacturers were to meet their export quotas to South Korea, South Korea would still have a 5-1 to 6-1 advantage. U.S. auto manufacturers would still have to overcome South Korean red tape to get their cars out of the ports and into the show rooms and South Korean auto unions, which would advocate for Koreans to buy Korean. ““Korean consumers prefer premium sedans from Europe and Japan, or small Korean-made cars to U.S. brands,” Song Won Gun, a senior research fellow at the Korea Economic Research Institute in Seoul, said before the announcement.” (“South Korea Sees `Limited' Impact on Auto Industry From U.S. Trade Accord,” Jungmin Hong, Bloomberg, 12/5/10).
South Korea has also generously given the U.S. permission to continue its 25% tariff on trucks exported from South Korea while dropping its 10% tariff on trucks exported from the U.S.; the U.S. exported less than 8,000 cars and trucks to South Korea in 2009.
President Obama said, “We are strengthening our ability to create and defend manufacturing jobs in the United States, increasing exports of agricultural products for American farmers and ranchers and opening Korea's services market to American companies.” (“U.S., South Korea reach free-trade deal,” Associated Press, 12/4/10). First of all, South Korean auto manufacturers will continue to open manufacturing plants in the U.S. to skirt the tariff. While this will lead to the creation of more jobs, the wages will be substantially less than the wages at U.S. based auto manufacturers, and the Korean based manufacturers will get substantial local tax breaks and benefits as communities compete for their factories. Secondly, the treaty does not solve the problem of Korean restrictions of U.S. beef and pork exports; the U.S. agreed to allow the Koreans to extend their 25% tariff on U.S. pork until 2016 and the two parties did not resolve the Korean ban on U.S. exports of beef from older cattle (Korea says that this is to protect its citizens from mad cow disease, but it is really to protect its heavily subsidized farmers from U.S. imports). As for opening the Korean services market to American companies, this is highly doubtful. Technology service jobs tend to flow from the U.S. to low wage Asia, and this trend will continue.
Korea reported an $8.6 billion trade surplus with the U.S., but this is deceptive. The U.S. military currently maintains about 29,100 personnel in Korea to prevent the North Koreans from marching the 31 miles from North Korea to Seoul, and spending by U.S. military personnel and the U.S. government on military infrastructure in South Korea runs into the billions of dollars and doesn’t figure into the trade surplus calculations. The South Koreans have 687,000 active military personnel, but they are far from being able to defend their own country from a North Korean invasion, as the recent shelling of Yeonpyeong island showed (they were caught with their pants down).
Who pays for our presence at the DMZ? The Koreans, North and South, hate us. In addition to the more than 29,000 personnel we maintain on the Korean peninsula to protect people who hate us, we also maintain bases on Guam (a U.S. territory), Okinawa (which was a Japanese island, then became an occupied U.S. island, and is now a Japanese island), and Japan which contain thousands of personnel ready to respond to Chinese and North Korean aggression. Shouldn’t South Korea and Japan pay most of the cost of U.S. mercenary protection? Shouldn’t South Korea and Japan ($8 billion trade surplus with the U.S.) use some of their trade surplus money to pay for the U.S. protective umbrella? If not, shouldn’t they at least allow American products and services into their countries unrestricted?
South Korea will arrogantly allow the U.S. to export a few cars, truck and pigs into Seoul, and they will “allow” the U.S. to continue defending their ability to export massive quantities of industrial goods to the U.S. while past presidents and our current President tell us that this is good for us; “President Obama hailed the agreement as a "landmark trade deal" that would support at least 70,000 U.S. jobs.” (“U.S., South Korea reach free-trade deal,” Associated Press, 12/4/10).
We’ve heard this one before.
The AP reports that South Korea is allowing the U.S. to lift the tariff on its cars exported to the U.S. in five years instead of immediately; how generous of them! U.S. auto manufacturers would be able to export 25,000 cars to South Korea as long as they meet U.S. federal safety standards (what’s the big deal about this?). South Korea exported nearly 500,000 vehicles to the U.S. market in 2009, so if all the U.S. based auto manufacturers were to meet their export quotas to South Korea, South Korea would still have a 5-1 to 6-1 advantage. U.S. auto manufacturers would still have to overcome South Korean red tape to get their cars out of the ports and into the show rooms and South Korean auto unions, which would advocate for Koreans to buy Korean. ““Korean consumers prefer premium sedans from Europe and Japan, or small Korean-made cars to U.S. brands,” Song Won Gun, a senior research fellow at the Korea Economic Research Institute in Seoul, said before the announcement.” (“South Korea Sees `Limited' Impact on Auto Industry From U.S. Trade Accord,” Jungmin Hong, Bloomberg, 12/5/10).
South Korea has also generously given the U.S. permission to continue its 25% tariff on trucks exported from South Korea while dropping its 10% tariff on trucks exported from the U.S.; the U.S. exported less than 8,000 cars and trucks to South Korea in 2009.
President Obama said, “We are strengthening our ability to create and defend manufacturing jobs in the United States, increasing exports of agricultural products for American farmers and ranchers and opening Korea's services market to American companies.” (“U.S., South Korea reach free-trade deal,” Associated Press, 12/4/10). First of all, South Korean auto manufacturers will continue to open manufacturing plants in the U.S. to skirt the tariff. While this will lead to the creation of more jobs, the wages will be substantially less than the wages at U.S. based auto manufacturers, and the Korean based manufacturers will get substantial local tax breaks and benefits as communities compete for their factories. Secondly, the treaty does not solve the problem of Korean restrictions of U.S. beef and pork exports; the U.S. agreed to allow the Koreans to extend their 25% tariff on U.S. pork until 2016 and the two parties did not resolve the Korean ban on U.S. exports of beef from older cattle (Korea says that this is to protect its citizens from mad cow disease, but it is really to protect its heavily subsidized farmers from U.S. imports). As for opening the Korean services market to American companies, this is highly doubtful. Technology service jobs tend to flow from the U.S. to low wage Asia, and this trend will continue.
Korea reported an $8.6 billion trade surplus with the U.S., but this is deceptive. The U.S. military currently maintains about 29,100 personnel in Korea to prevent the North Koreans from marching the 31 miles from North Korea to Seoul, and spending by U.S. military personnel and the U.S. government on military infrastructure in South Korea runs into the billions of dollars and doesn’t figure into the trade surplus calculations. The South Koreans have 687,000 active military personnel, but they are far from being able to defend their own country from a North Korean invasion, as the recent shelling of Yeonpyeong island showed (they were caught with their pants down).
Who pays for our presence at the DMZ? The Koreans, North and South, hate us. In addition to the more than 29,000 personnel we maintain on the Korean peninsula to protect people who hate us, we also maintain bases on Guam (a U.S. territory), Okinawa (which was a Japanese island, then became an occupied U.S. island, and is now a Japanese island), and Japan which contain thousands of personnel ready to respond to Chinese and North Korean aggression. Shouldn’t South Korea and Japan pay most of the cost of U.S. mercenary protection? Shouldn’t South Korea and Japan ($8 billion trade surplus with the U.S.) use some of their trade surplus money to pay for the U.S. protective umbrella? If not, shouldn’t they at least allow American products and services into their countries unrestricted?
South Korea will arrogantly allow the U.S. to export a few cars, truck and pigs into Seoul, and they will “allow” the U.S. to continue defending their ability to export massive quantities of industrial goods to the U.S. while past presidents and our current President tell us that this is good for us; “President Obama hailed the agreement as a "landmark trade deal" that would support at least 70,000 U.S. jobs.” (“U.S., South Korea reach free-trade deal,” Associated Press, 12/4/10).
We’ve heard this one before.
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