60-Second Expert: Nix the FTA

The Obama administration is actively seeking to ratify the U.S.-Korea Free Trade Agreement (FTA) before the G-20 meeting in mid-November. Though the deadline is looming, Obama is waiting for November’s mid-term elections to pass before actively pursuing the issue. The president’s reluctance to open up the debate is understandable; the American public is growing increasingly angry with policies that enhance corporate power, and the FTA is another flagrant example.

Corporate support for the FTA rests on a trade in interests, with Korean manufacturing firms willing to sacrifice their country’s agricultural, financial, and health sectors to gain a greater share of the American market, and leading U.S. agriculture, financial, and pharmaceutical firms sharing a corresponding interest. The byproduct of such a deal would almost certainly be intensified international competition leading to downward pressure on wages and working conditions in both countries.

The administration’s claims of FTA benefits for “working people” are disingenuous at best, resting on a modeling process which employs unrealistic assumptions such as full employment and balance of payments equilibrium and yet still produces “projected” GDP gains of less than a tenth of a percent. Even more damaging than the trade effects, the FTA also includes numerous provisions that would, among other things, undermine government efforts to regulate speculative financial activity, control health costs, and defend environmental and labor standards.

Though the Korean Confederation of Trade Unions and the AFL-CIO have teamed up to oppose the FTA, their objections have tended to focus on specific trade related issues, when what is needed is a broader campaign that makes clear that this agreement is nothing more than yet another mechanism to boost corporate profits.

Their demand for a “review and renegotiation” of the agreement fundamentally fails to acknowledge that an instrument deliberately designed to privilege corporate interests over the general good is inherently beyond repair. By forcefully rejecting this agreement – and all others like it – we can help reopen public debate about the need to create a new economic system, one that works for the great majority of us.

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Christine Ahn is a policy and research analyst with the Global Fund for Women and a Foreign Policy In Focus columnist. Martin Hart-Landsberg is a professor of economics at Lewis and Clark College, a Korea specialist, and a contributor to Foreign Policy In Focus.