Smart trade

Monday, June 28, 2010

RECENT EVENTS on the Korean Peninsula have demonstrated how vital the region is to U.S. interests and how dangerous it would be to neglect our democratic ally, South Korea. The March sinking of a South Korean naval vessel by North Korean forces underscored the military danger that Kim Jong Il's regime poses to the South, to Japan and to the U.S. troops who still stand guard almost six decades since the end of the Korean War. Less spectacular, but no less ominous, in its own way, has been the recent progress toward free-trade agreements between South Korea and U.S. competitors in Europe and Canada. The U.S.-Korea Trade Promotion Agreement, negotiated during the George W. Bush administration, promises to shore up the U.S. position in the region both diplomatically and economically. But until now, the Obama administration, bowing to anti-free-trade sentiment in the Democratic Congress, has declined to pursue final approval of the agreement on Capitol Hill.

Now, fortunately, that has changed. At the Group of 20 summit in Toronto, President Obama announced that he wants to settle a few outstanding issues with Seoul in time for the next summit there, which is to be held in November. He would then submit the free-trade agreement to Congress after the November elections. The strategy promises that lawmakers can consider the treaty at a time of relatively muted political pressure. And that's good, because, if it had been considered strictly on the merits, this deal would have passed long ago. It slashes tariffs and nontariff barriers across the board on both sides, opening the trillion-dollar Korean economy to a wide range of U.S. products and services. This will go a long way toward helping Mr. Obama meet his goal of doubling U.S. exports over the next half-decade.

What lingering opposition there is focuses on the agreement's alleged failure to open the Korean market sufficiently to U.S. autos and beef. On autos, the objections reflect the concerns of the United Auto Workers and U.S. automakers -- except for General Motors. The fact is, however, that the agreement offers U.S. carmakers far better access to the Korean market than they have known and allows the United States to reinstate tariffs on South Korean vehicles if Seoul creates new nontariff barriers on American vehicles. The beef issue is complicated, reflecting the South's exaggerated response to a 2003 outbreak of mad-cow disease in the United States. But Korean concerns over the issue have calmed recently and -- after the North Korean attack -- Korean appreciation for good relations with the United States has grown. That should make it possible for U.S. and Korean negotiators to paper over their remaining differences in this regard.

To be sure, congressional opponents of the deal remain wary and determined. But Mr. Obama's wise decision vastly increases the chances for success. If he devotes even a fraction of the energy to passing this agreement that he dedicated to health care and financial regulation, it should win a large, bipartisan majority.

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