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Sep 7, 2011

America Needs the Korea-U.S. FTA: Politics Trap Trade Pack – StarTribune

A great article appears in the StarTribune entitled - Politics traps trade packs.

The StarTribune, a Minnesota-based daily, quotes the director of international business relations at Cargill. Cargill is a leading international meat exporter headquartered in Minnesota.

Time is critical . . . If we don’t pass these agreements, other countries get the deals and other countries get the jobs. Canada started later then the U.S. negotiating with Panama and Columbia, but passed agreements sooner.

We have already seen this issue occuring in Korea. European countries are increasingly interested in and  increasingly penning deals in South Korea.  If a European company gets its foot in first, then, American companies will be at a stark disadvantage.

The reality is that the first Korean importers, wholesalers and retailers that team up with foreign companies will be the more effective partners for the foreign partners.  American companies will be simply grappling for the leftovers.  Leftovers that, often, lack adequate access to the Korean market. 

In Korea, get in with the big guys and you are set - wrestle with the small guys and you will be prematurely grey and a little lighter in your pockets.

The article goes on to quote U.S. Trade Representative Ron Kirk.

Korea completed a trade agreement with the European Union that went into effect July 1 . . . Some anecdotal evidence suggests that Europe’s exports are already up 16 percent. There is plenty of economic modeling that will show that the overwhelming majority of jobs lost in manufacturing in this country over the last 20 years has been due to increase in automation and innovation, not trade.

The political bickering and emphasis on political survival is crippling America's chances of recovering from our recession through private sector growth and we know that Obama has already failed to spend us out of this mess.

As in the words of Kirk, “The only people who are happy that the United States is in this impasse are our competitors. They would love nothing more than to have the United States sit on the sidelines.”

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SeanHayes@ipglegal.com