US President Barack Obama is risking a revolt within his own party as he presses ahead on a free trade agreement (FTA) with South Korea, setting the stage for a showdown after November legislative elections.
Organized labor, a critical support base for Obama’s Democratic Party, and several Democrats have already vowed to fight the deal which they say would hurt workers.
“To try and advance the Korean FTA when so many workers are still struggling to find work would simply move our economy backward,” said Representative Louise Slaughter, a Democrat who leads the powerful Rules Committee.
The deal would be the largest for the US since the the North American Free Trade Agreement (NAFTA) with Canada and Mexico in 1994.
The US and South Korea completed painstaking negotiations in 2007, but neither nation’s legislature has ratified it.
Obama himself criticized the deal as a senator. But as president, Obama has found South Korean President Lee Myung-Bak to be one of his closest allies and has said he is convinced of the benefits of boosting trade with Asia’s fourth largest economy.
“It will strengthen our commercial ties and create enormous potential economic benefits and create jobs here in the United States, which is my No. 1 priority,” Obama said in Toronto.
Obama said he would send the agreement to Congress soon after November — the month of a G20 summit in South Korea as well as congressional elections in which Democrats are seen as vulnerable to losses.
Ironically, the rival Republican Party, while opposed to many of Obama’s key priorities such as climate and immigration legislation, may offer greater support than Democrats on the South Korea free trade agreement.
“Before the midterm elections, he cannot submit this to Congress. It’s impossible,” said Anthony Kim, a policy analyst at the Heritage Foundation, a conservative think-tank.
“But after the election, there will be a new set of minds. It will be an uphill battle — there is no doubt about that — but I think it may come to life next year,” he said.
Sabina Dewan, associate director of international economic policy at the left-leaning Center for American Progress, said that any trade deal would be controversial at a time when the wobbly US economy is voters’ top concern.
However, she noted that Obama has set a goal of doubling US exports as a way to fuel growth and that, in a globalized economy, the US risked being left behind.
“Given the domestic climate and the challenges that President Obama is facing right now, he would not have picked this battle if he didn’t truly believe in the merits of it,” she said.
“Of course, any time you have a new trade agreement you have a restructuring of economic activity, which means that some people will be better off while others will have to adjust to change,” she said.
Former Democratic president Bill Clinton championed NAFTA despite staunch opposition from many in his party who have argued, then and now, that it has encouraged manufacturers to shift jobs to Mexico in search of cheaper labor.
Opposition to the South Korea deal has focused more on specific sectors, with legislators seeking more access for US autos and beef.
Beef is particularly sensitive for Lee after South Koreans held major street protests in 2008 charging that the US imports were unsafe. South Korea has resisted renegotiating any of the deal.
For South Korean policymakers, free trade is seen as a crucial strategy to boost the competitiveness of an economy lying between giants Japan and China. Seoul has also pursued trade pacts with the EU and India.
Han Duk-soo, the South Korean ambassador to Washington, said he has met with 35 — or more than one-third — of US senators and 135 House members to promote the deal which he argued would create some 72,000 US jobs.
Han last week joined three Democrats and three Republicans who set up a caucus in Congress in support of the deal.
“For three years, Congress and the White House have wrung their hands while this no-cost job creation measure sits cooling on the dinner table,” said one of the members, Republican Representative Peter Roskam of Illinois.
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
Authorities have detained three former Taiwan Semiconductor Manufacturing Co (TMSC, 台積電) employees on suspicion of compromising classified technology used in making 2-nanometer chips, the Taiwan High Prosecutors’ Office said yesterday. Prosecutors are holding a former TSMC engineer surnamed Chen (陳) and two recently sacked TSMC engineers, including one person surnamed Wu (吳) in detention with restricted communication, following an investigation launched on July 25, a statement said. The announcement came a day after Nikkei Asia reported on the technology theft in an exclusive story, saying TSMC had fired two workers for contravening data rules on advanced chipmaking technology. Two-nanometer wafers are the most
NEW GEAR: On top of the new Tien Kung IV air defense missiles, the military is expected to place orders for a new combat vehicle next year for delivery in 2028 Mass production of Tien Kung IV (Sky Bow IV) missiles is expected to start next year, with plans to order 122 pods, the Ministry of National Defense’s (MND) latest list of regulated military material showed. The document said that the armed forces would obtain 46 pods of the air defense missiles next year and 76 pods the year after that. The Tien Kung IV is designed to intercept cruise missiles and ballistic missiles to an altitude of 70km, compared with the 60km maximum altitude achieved by the Missile Segment Enhancement variant of PAC-3 systems. A defense source said yesterday that the number of
Taiwanese exports to the US are to be subject to a 20 percent tariff starting on Thursday next week, according to an executive order signed by US President Donald Trump yesterday. The 20 percent levy was the same as the tariffs imposed on Vietnam, Sri Lanka and Bangladesh by Trump. It was higher than the tariffs imposed on Japan, South Korea and the EU (15 percent), as well as those on the Philippines (19 percent). A Taiwan official with knowledge of the matter said it is a "phased" tariff rate, and negotiations would continue. "Once negotiations conclude, Taiwan will obtain a better
RSS