Just days after President Barack Obama reaffirmed his support for the Korean free trade agreement and laid out a clear timetable for its passage, critics of the deal have let their displeasure be abundantly clear.
Labor, interest groups and even members of the president’s own party have assailed the deal as a job-killing redux of the North American Free Trade Agreement. Concerns over lack of market access for American automakers and beef producers, to investor’s rights protections, to potential job losses have led many allies to speak out publicly.
Labor leaders are concerned about the potential impact of the deal on the auto, steel, and other industrial sectors. They say the agreement would only worsen an already lopsided trading relationship with South Korea, which will lead to domestic job loss.
"This flawed agreement is the last thing working people need," Richard Trumka, president of the AFL-CIO, said in a statement.
Trumka and fellow labor leaders are especially concerned about the impact the deal could have on American auto manufacturers.
In 2007, the U.S. sold 7,000 American vehicles in South Korea, or less than one percent of the entire market. South Korean automakers, on the other hand, sold 615,000 vehicles in the U.S. that same year, according to Pat Choate's book Saving Capitalism.
The deal would do more than just harm the auto industry, however. A study by the Economic Policy Institute found that the trade pact would expand the trade deficit with South Korea by $13.9 billion and cost the U.S. 159,000 jobs over a seven year period.
"With a fragile and incomplete economic recovery, and unemployment estimated to remain near 10 percent for the foreseeable future, we should not be putting in place new trade agreements that will speed up the offshoring of US manufacturing jobs," Trumka said.
Another concern among critics of the deal are the investor-rights privilege afforded to foreign corporations in the bill. According to Public Citizen’s Eyes on Trade, the provision would allow foreign corporations to sue the government and challenge even environmental laws in court.
“The private investor-state enforcement of an array of property rights that would provide Korea firms operating in the United States greater rights than provided to domestic firms and investors under U.S. law as interpreted by the U.S. Supreme Court,” Lori Wallach of Public Citizen said in a statement. “This is an especially critical problem given that Korea is a capital exporter and these extraordinary rights would apply to the nearly 200 Korean firms already established here.”
According to Wallach, the deal also includes a provision that would undermine the financial reform regulation making its way through Congress.
“Like the World Trade Organization, Central America Free Trade Agreement and the Peru FTA, the Korea FTA commits its signatory countries to refrain from limiting the size of financial institutions, banning toxic derivatives, or controlling destabilizing capital flights and floods,” she said.
If passed, the trade pact, which was negotiated under the Bush administration, would become the first of Obama’s presidency and also the largest since NAFTA. However, with even Democrats speaking out against the deal, getting it through Congress could be easier said than done.
“This is another flawed NAFTA-style trade agreement negotiated by the Bush Administration for the benefit of big corporations and at the expense of the American worker," Rep. Michael Michaud (D-ME), who heads an anti-free trade caucus in the House, said in a statement. "President Obama’s commitment to fixing the agreement is laudable if it involves reopening the agreement and fixing not only the market-access issues for American beef and car exports, but also the fundamental imbalances in our previously-negotiated free trade agreements."