Savings Bonds Phased Out, Foreign Borrowing Continues
After months of extreme opposition from its Democratic Party (DP), South Korea approved the pending Korean-U.S. Free Trade Agreement (KORUS). The ruling Grand National Party forced the legislation to be put to vote, and it was overwhelmingly passed, 151 to 7. Opponents of the pact were infuriated, however, and quickly turned the National Assembly into a scream-filled teargas chamber. It seems KORUS is generating just as many apprehensions in South Korea as it is in the United States.
Less than an hour before the pact was approved, a member of the opposing DP began soaking his adversaries with tear gas. This actually comes as very little surprise, considering protesters of KORUS have been gathered outside the Assembly every day for the last several weeks. Police have been on hand all month to help control crowds that have at times exceeded 2,000 dissenters.
Clearly, South Koreans have concerns about how this trade agreement may impact their economy. Members of their DP believe that Korean farmers and small business owners will be crushed by American imports. The issue had been stalled because the opposition has demanded the agreement be renegotiated.
Meanwhile, KORUS is the largest free trade agreement that the U.S. has entered into since the North American Free Trade Agreement (NAFTA) back in 1994. The effects of NAFTA on the American economy have been unfavorable, to say the least, and many economists believe that KORUS may be a mistake for the United States. Just as NAFTA moved American jobs to Mexico, where labor is cheap and unregulated, KORUS has the ability to move jobs to South Korea. In spite of this, President Obama and Congress approved the pact back in September.
So it seems both parties involved have similar concerns about the impact unrestricted trade will have on their economy. So who actually wins in the midst of a free trade agreement of this caliber?
The answer is neither country. Or, more specifically, the only winners are the multinational corporations and special interest groups that make up a small percentage of each country. Free trade ultimately crushes the middle and lower classes of all parties involved, while further enriching the wealthy along the way. Manufacturing is outsourced, poorer labor conditions are nurtured, and only the heads of these large companies reap any benefits.
President Obama and Korean President Lee Myung-bak have both made decisions that have the common people of their respective countries concerned. American proponents of KORUS claim that it will bolster the American economy and that we are doing a service to the Asian economy along the way. It is starting to look like neither of those things will be true.
The Korean public’s reaction to its ratification suggests that KORUS will not be good for the middle class of either country. The United States cannot control how South Korea operates its economy, but we do have that power here at home. The upsides our lawmakers are telling us about free trade agreements are fictitious. We need to find a way out of harmful pacts like KORUS and NAFTA before more damage is done to any country – especially our own.
