Contact: Jody Clarke, 202.331.2252
Washington, D.C., October 15, 2007—As Congress considers bilateral trade agreements with several countries, a new study from the Competitive Enterprise Institute shows why the free trade agreement with South Korea should move forward.
In "The United States-South Korea Free Trade Agreement: An Economic and Political Analysis," author Gabriel Sahlgren writes that the agreement is "unquestionably the most important such treaty since the 1994 North America Free Trade Agreement."
Today South Korea is the world’s 10th-largest economy and America’s seventh-largest trading partner. The agreement would eliminate nearly all tariffs on industrial and consumer goods within a decade, increasing U.S. GDP by up to nearly 12 billion dollars and possibly boosting annual trade between the two countries by as much as 18 billion dollars.
However, the study points out that the Democratic takeover in Congress has led to a less friendly environment toward free trade. In addition, opposition from labor and trade unions forced the Bush administration to renegotiate the deal to include more stringent labor and environmental standards. The agreement was finally signed on June 30, 2007 and now awaits ratification by Congress.
"Economic growth and increased productivity give countries an opportunity to improve their labor and environmental standards," notes Sahlgren. "South Korea has been a democracy for more than two decades. It is up to South Koreans to decide what kind of labor and environmental provisions to adopt, not the U.S.
Sahlgren concludes that despite the agreement’s flaws regarding the environmental and labor provisions, the deal’s economic and political gains outweigh the negatives and should be ratified.