[Overseas view]Overcoming roadblocks to FTA

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[Overseas view]Overcoming roadblocks to FTA

Democratic Congre-ssional leaders Nancy Pelosi, Steny Hoyer, Sander Levin and Charles Rangel fired a damaging broadside on June 30 when they suddenly announced that they would not authorize continued trade promotion authority for the president to negotiate free trade agreements, nor would they support the U.S.-Korea free trade agreement.
Only one month before, U.S. Trade Representative Susan Schwab had reached an agreement with these same Democratic leaders after compromising on trade and environmental issues to pave the way for extension of the authority and passage of FTAs with Latin America and Korea.
The Democrats’ June 30 announcement came as a great surprise to Schwab, who only learned about it from press reports. South Korean Trade Minister Kim Hyun-chong had to be told as he got off the plane to sign the FTA. The timing of the announcement ― just as the two trade ministers were set to sign the FTA and on a Friday, so that the administration or the Korean government would have no chance to respond before reporters went home for the weekend ― was as damaging as the content. Officials in both Washington and Seoul were shocked and furious. Schwab and her team, who made compromises that angered Seoul in order to win the Democrats’ agreement a month ago, felt particularly betrayed.
What does this sudden bombshell mean for the U.S.-Korea FTA and the alliance? The first lesson the Blue House should draw from this episode is that liberal Democrats are not necessarily their friends. At one point, the progressive camp in Seoul played the Democratic members of Congress against the Bush administration in an effort to soften U.S. policy toward North Korea (always through NGO-to-NGO links rather than from the government itself, of course). Indeed, some of the same members of Congress who announced their opposition to the FTA last week sent letters to the White House in years past urging the administration to “be good to our ally South Korea” by engaging Pyongyang. Any hope by progressives in Seoul that Democrats really cared more about U.S.-Korea relations than their domestic political interests in attacking President Bush over North Korea policy should now be called into question as the Democratic leadership shows its protectionist colors. More disturbing was the opposition of Democratic presidential front-runner Hillary Clinton to the U.S.-Korea FTA. Clinton is seen as the most “realist” and “internationalist” of the Democratic candidates, but she clearly did not want to risk losing the hard-core labor vote in the Democratic primary, and her pandering to special interests has been disappointing to her internationalist supporters.
One thing is certain: the Bush administration is not giving up the fight. Rather than feeling defeatist, senior officials are angry and determined to prevail in the ultimate passage of the FTA. There are several scenarios that could unfold over the coming months to make this possible. President Roh’s determination to pass the FTA in the National Assembly before leaving office in February is encouraging. It will also be critical for the Korean government to resolve the beef issue as soon as possible, which would then allow the Bush administration to begin peeling off pro-free trade Democrats, especially those from agricultural states. One possible target is Congressman Rangel, the Chairman of the House Ways and Means Committee, whose district in Harlem, New York City does not have major labor unions. Rangel is also a Korean War veteran with a genuine affection for Korea and commitment to bilateral relations. Another target could be presidential candidate Barack Obama, who may be convinced to stand for the U.S.-Korea FTA in order to take advantage of Clinton’s surprise protectionist stance and establish his own reputation for mature internationalism ― something he could do because his current support rests more on the younger Internet generation (just like President Roh in 2002), rather than the traditional trade union political machine. But it is not clear whether Obama is willing to challenge Clinton over trade issues.
The White House will be helped in this battle by the strong press criticism of the Democratic leadership’s stance. Not surprisingly, the pro-business Wall Street Journal immediately blasted the Democratic leadership for their protectionism and political pandering.
The center-left Washington Post has also published a steady stream of harsh criticism, which has taken the Democrats by surprise. The editorial position of these newspapers may cause many Democrats to question whether pandering to labor unions in the primary is worth the risk to Democratic candidates’ standing in the general elections in 2008. Many in the media have noted the irony of the Democratic leadership in Congress rejecting an FTA with Korea over labor and environmental issues, when those standards are already so strong in Korea. The Washington Post and others have noted that the Democratic position has been dictated by two of the three major U.S. auto companies and the United Auto Workers labor union and driven by Congressman Sander Levin of Michigan. These editorials have highlighted the U.S. auto companies’ false arguments that the Korean auto market is closed as a reason for blocking the FTA, when in fact their real aim is to try to block Hyundai’s access to the U.S. market. The Washington Post made the obvious point that those companies won’t get more access to the Korean market without the FTA, which reduces tariffs and non-tariff barriers. It will help the administration battle back that the press is pointing out all the inconsistencies in the Democrats’ arguments.
The U.S.-Korea FTA is still very much alive. Its passage in the Congress and National Assembly will add jobs and economic growth to both the U.S. and Korea and cement a strategic partnership across the Pacific that will help set a standard for trade liberalization and underpin security across the region. The Democratic broadside on Friday came as a shock, but it is just one salvo in a battle that will continue for months. And the Bush administration has plenty of gunpowder to fire back. Korea will have to do its part, and that means staying firm on moving the FTA through the National Assembly and taking early steps on key issues, such as beef.

*The writer is a former senior director for Asian affairs at the U.S. National Security Council.

by Michael Green

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