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The Guilfordian

The student news site of Guilford College

The Guilfordian

The student news site of Guilford College

The Guilfordian

U.S./South Korea agreement shows paradox of free trade

Exploding a canister of tear gas on the floor of the South Korean Parliament, politician Kim Sun-dong expressed his disapproval of a free trade agreement with the U.S. by choking fellow Parliament members during a November vote.

“The legislators were passing a bill which will make ordinary people shed bitter tears,” Sun-dong later told a crowd of supporters. “So I detonated tear gas so that they, too, shed tears.”

The scene illustrates the decisiveness of opinions surrounding the much anticipated — and delayed — free trade agreement between the U.S. and South Korea, which will go into effect on March 15.

The deal — which aims to boost the economic output of both countries — has its critics, especially in South Korea. The opposition cites the harmful effects the treaty will likely have on the nation’s agricultural and livestock sector.

“Free trade is a double-edged sword,” said Associate Professor of Political Science George Guo. “It might benefit some industries and hurt others.”

Free trade agreements work to increase and encourage trade by reducing or eliminating taxes on foreign goods. These taxes, called tariffs, are normally used to keep the price of foreign goods artificially high, allowing weaker domestic industries to stay in business in spite of international competition.

Prior to this deal, high tariffs on foreign agricultural goods to South Korea ensured that Korean farmers could stay competitive even though companies in the U.S. could produce and sell the same goods at a much lower cost.

Those potential consequences of the agreement have caused a political maelstrom in South Korea. According to the Los Angeles Times, hundreds turned out in the capital city of Seoul for a Feb. 25 protest against the agreement, brandishing signs with printed messages such as “Be mournful, be angry! The U.S. colonization of South Korea has started!”

“In most countries agriculture is vital, because it holds stability for the country,” said Guo. “Governments spend to maintain stability, to not rely on other countries.”

In response to the criticism of the deal, South Korean President Lee Myung-bak said that the government would take on responsibility for threatened industries.

“For some agriculture and stock farming industries that are threatened, our government can take this chance to support those fragile industries and make it more competitive,” Lee said. “I believe that the agreement could create many jobs.”

The agreement should also help improve the American economy and create jobs.

According to U.S. Trade Commission, over $10 billion will be added to the U.S. GDP just from tariff and quota reductions and eliminations by South Korea. President Obama considers the deal part of his plan to double American exports by 2015.

U.S. Trade Representative Ron Kirk explained in an interview with the Dow Jones Newswire that the deal should support “tens of thousands of jobs” and boost trade between the countries by ten percent over the next five years.

“The United States is looking for more jobs,” said Guo. “For jobs, you need more markets.”

The deal also speaks to the United States’ foreign policy priorities.

“The United States wants to have more influence in East Asia,” said Guo, adding that our country wants to contain China’s extending power in the region.

“The twenty-first century is likely to be the century of the Pacific,” said Professor of Economics Bob Williams.

According to a press release from the Office of the U.S. Trade Representative, the agreement also underscores the U.S.’ “geostrategic alliance” with South Korea. The relationship allows the two countries to work together on other mutual issues, such as the threat of North Korea.

Still, that’s cold comfort to some in South Korea.

“Many say (the deal) is for the top one percent (of) wealthy people and that it doesn’t consider the ordinary people,” said Early College student Hannah Park, who is from South Korea. “Positive comments about the issue are very rare.”

Williams bemoans this overarching problem of inequality that free trade presents. “There ought to be a mechanism for the winners to offset the losses of the losers,” Williams said. “But unfortunately, there isn’t.”

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