The South Korea Trade Deal

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/11/AR2010111103288.html?referrer=emailarticle

So, our President went to India with an entourage of U.S. business leaders and proposed "freer" trade. He did the same in Indonesia. But, when he got to South Korea, the country hosting this week's G-20 meetings, he couldn't close the most important deal: a deal that would increase U.S. exports by $10 billion annually and support 70,000 jobs in the U.S. Although the list of outstanding issues was short, and the U.S. Chamber of Commerce lobbied heavily for the agreement, key labor and auto interests and their allies in Congress demanded a fuller opening of South Korea's market.

South Korea is a hot economy. As Nouriel Roubini pointed out in his 2010 book, "Crisis Economics," what used to be called "BRIC" (depicting the major moving economies of the world: Brazil, Russia, India and China) might be better be depicted as "BRICK" to include South Korea. Roubini: "South Korea is a sophisticated high-tech economic power: innovative, dynamic and home to a skilled labor force. Its only major problem is the danger that North Korea will collapse and inundate it with hungry refugees."

But we can't make a trade deal with them. Really. Forgive my patriotic zeal, but they exist because of us. My wife's father was a decorated Marine wounded twice at Iwo Jima during WW II who went back to fight in the Korean War. We lost 40,000 men in Korea so these people could have a country of their own. But, forgetting that, how incompetent are we that we can't get our act together and make a deal that was set to happen BEFORE President Obama got there. We look like fools.

Is this what "mid-term losses" cost a President? Or, is this just an incompetent Presidential administration?

How many Hyundais can an unemployed U.S. worker buy?

Make the deal.

This is a President that has pushed to elevate the G-20 as the main forum for coordinating world economic policy (and it should be: it's the 19 largest economies plus the EU). But, it does not appear that the G-20 is giving back much cooperation - there's an undertone of: the worldwide economic crisis was the fault of the U.S. Nobody in the G-20 is going to pressure China over its undervalued currency when the Fed has just pumped another $600 billion into the U.S. economy, basically "undervaluing the dollar" as we watch "oil" go up to $86 per barrel.

But the EU has made a free-trade pact with South Korea which means that European cars and other products will soon face lower duties as they enter South Korea. What does the EU know that we don't?

Here's an idea: how about we remove some troops from Korean demilitarized zone unless we get the free trade deal we want? Let's take off the gloves - everybody else has.