Seoul stands behind KORUS FTA

The Los Angeles Times' new Seoul correspondent, John Glionna, has an interview with Kim Jonghoon (김종훈, kim chonghun), the ROK Trade Minister, where the Seoul official talks about South Korea's plans to pursue the ROK-US free-trade agreement despite criticism of the Bush43-era deal within the Obama administration.

Glionna specifically focuses on the issue of cars and Obama's claims that automobile trade is unfair now and would be made worse if the FTA passed. Glionna asked Kim about criticisms that the FTA "gives Korean auto companies guaranteed access to the US market without assurances that American companies can break into the Korean market." Kim's response:

Nothing can be guaranteed in a market but a level playing competition. The [agreement] contains everything the U.S. asked for during the negotiations; immediate elimination of Korea's current 8% tariff on autos, flatten the consumption tax to 5% within three years [no differentiation by engine size]. . . . and lenient exceptions for U.S.-made cars in environmental and safety standards. The [U.S. International Trade Commission] report estimated that the agreement would provide a good base to substantially improve U.S. auto companies' access to the Korean market.

Frankly, I am actually very uncomfortable with what Seoul has done in order to appease Washington on this issue. The elimination of tariffs is done in the spirit of free-trade agreements, but the consumption tax was no "non-tariff barrier," as it applied to both foreign and domestic cars and was aimed at getting more fuel-efficient vehicles on the road. This is being scrapped now in order to hand-hold Detroit as they try to peddle their gas guzzlers.

Glionna may have asked Kim some softball questions. I don't mind, though, because it gave Kim a chance to attack Obama's (and Dodd's) little lie on Korean car imports:

Both Korean and American automakers sell cars by exporting and by producing at local subsidiaries. The number of cars sold in such manner in 2008 is: Korea sold in the U.S. 636,960 cars, while the U.S. sold in Korea 109,940 cars. Considering the size of the U.S. auto market, which is 14 times larger than that of Korea, a less than 7 to 1 ratio should not be regarded as unfair.

The "lie" that Obama repeated several times on the campaign trail (and which Senator Chris Dodd parroted) is that in the ROK-US FTA, "all we can do is sell 5,000 automobiles in South Korea; they get to sell 600,000 of their automobiles in the United States."

This is only true if vehicles manufactured at Hyundai and Kia factories in the United States are counted as Korean but vehicles manufactured by GM-Daewoo (that's right, GM as in General Motors) in Korea are also counted as Korean. In other words a double standard.

[above: Hyundai Motor Company's brand-spanking-new automobile plant in Montgomery, Alabama. Oddly enough, it doesn't seem to have any cars around it.]

Make a proper comparison and we get a 7 to 1 ratio between two countries that have a 6 to 1 population ratio and a 14 to 1 market size ratio, quite a different picture from the 120 to 1 distortion Obama and Dodd have been peddling.

If the FTA does not pass, I will withhold my vote for any Democrat who worked against it, as I did with Obama last November. California's two US Senators, Barbara Boxer and Dianne Feinstein, might support the FTA, since Californians understand the importance of trade with Asia, and the US Representative in my Congressional District will probably be a Republican until the ice caps melt, so I'm guessing that person will support the FTA; in other words, I may be looking at voting for someone else in 2012. I might write in Gore, or perhaps Al Franken (I'd have to see their positions on the FTA).

This is not just my support for the South Korean economy, but my steadfast belief that America's trade ties help strengthen the values it promotes around the world. Moreover, I am tired of the Democratic Party being held hostage to unions with outmoded ideas. That's the key to my protest vote.