[Overseas view]FTA’s importance is wide-ranging

Home > Opinion > Columns

print dictionary print

[Overseas view]FTA’s importance is wide-ranging

The trade accord just reached between the United States and South Korea is profoundly important, with truly global implications. The largest bilateral agreement in history would end tariffs on more than 90 percent of trade categories between the two nations. Equally important is the historical context.
The agreement was achieved under the shadow of the imminent expiration of the fast-track negotiating authority granted to the Bush administration by Congress. U.S. legislators may still stymie implementation, especially in the increasingly tempestuous atmosphere of presidential politics. The confrontational stance of both the White House and Congressional Democrats guarantees intense debate.
The Korean National Assembly may also witness controversy over the matter, especially given the nationalism and anti-Americanism of some politicians. Yet the opposition Grand National Prty is generally sympathetic to business concerns, including more open international trade and investment.
The relatively fluid, shifting situation among the political parties generally may facilitate the passage as well as the creation of fresh alliances and combinations encouraged by relatively specific economic considerations and interests, in addition to a broad commitment to more open markets.
As this implies, powerful pressures are converging in favor of passage, on both sides of the Pacific. South Korea has reflected other Asian economies in using protectionism to shelter favored industries. Yet this economy, which following the Korean War was among the poorest in the world, is today among the richest and the 11th largest.
The Korean economic powerhouse contains multitudes of ever more prosperous consumers who want lower prices and a higher diversity of affordable goods, and its business leaders are anxious to expand overseas.
Rapid economic development has been directly reflected in the exceptional expansion of production. The Korea Institute for International Economic Policy has predicted that exports under the new agreement would expand initially by 12 percent a year, and grow more in future years.
American economic opportunities, in particular related to agriculture and automobiles, also are apparent in the specifics of the agreement. Seoul will gradually end the beef tariff, currently set at 40 percent, and resume imports from the United States that were halted in 2003 during fears about foot-and-mouth disease. Likewise, Korean limits based on vehicle engine size and capacity would be cut.
More broadly, the understanding has strategic political and economic significance. First, South Korea’s influence is guaranteed to continue to grow, regionally and globally. Anticipated future talks will focus on including the Kaesong industrial area in North Korea under the market-opening umbrella. The Bush administration has been opposed to this, but realistic power considerations argue otherwise. Over time, engagement of the North in wider economic development will increase Seoul’s influence on Pyongyang.
The importance of the agreement is directly related to the fact that the Korean “economic miracle” is truly just that. The continued extraordinary success of the country in economic terms will only reinforce steadily expanding regional ― and global ― political and diplomatic influence. This, in turn, creates very powerful pressures to ratify the agreement in the United States, and to build on existing cooperative momentum.
Second, contemporary globalization means, among other things, that sheer geographic distance is far less consequential than in the past. In earlier eras, viable free trade agreements generally involved neighboring territories, such as the United States and Canada (and then Mexico) or the members of the European Union. The Korea-U.S. accord means even distant partners have close interests.
Third, South Korea’s economic development and democratic political evolution are direct testimony to the wisdom of American foreign policies over many years. President Truman demonstrated great courage in 1950 in immediately intervening in the Korean War. The new United Nations was confirmed as a viable institution through American backing and leadership of the pivotal, and ultimately generally successful, effort to defend South Korea against brutal military aggression.
President Eisenhower demonstrated great effectiveness in ending that war very soon after taking office, then leading a thoroughly and carefully planned reconstruction of South Korea. A devastated nation was provided the foundation for later economic ― and political ― success.
Through two terms in the White House, Ike regularly repeated warnings about the unpredictable dangers of war, and the imperative of preserving peace. His accomplishment of ending the Korean War on acceptable terms, following his enormous success in leading the Allied coalition that won World War II in Europe, brought him great standing and influence.
This laudable American legacy would be well-served by rapid ratification of the new economic agreement.

*Arthur I. Cyr is Clausen Distinguished Professor at Carthage College in Wisconsin and author of “After the Cold War” (NYU Press and Palgrave/Macmillan). He can be reached at acyr@carthage.edu

by Arthur I. Cyr
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)