On South Korea trade deal, Obama and chamber are on same side
On the eve of President Obama’s expected push for American competitiveness in his State of the Union speech, the U.S. Chamber of Commerce kicked off a lobbying campaign in Los Angeles to push the U.S.-Korea Free Trade Agreement.
Its most unusual feature: close cooperation between the business group and the White House.
The trade deal, which would be the largest since NAFTA took effect in 1994, has provided the first notes of harmony between the Obama administration and the chamber, whose relationship has been strained almost since the moment Obama took office.
The president recently hailed the U.S.-South Korea trade pact — negotiated by his predecessor George W. Bush but yet to be passed by Congress — as “a win for American workers.” His support is part of larger campaign to boost U.S. exports to stimulate jobs and reduce the trade deficit, themes the president is expected to emphasize in his address Tuesday.
It’s also the latest in a series of moves by the White House to reach out to business leaders, many of whom have been cool to what they consider burdensome Democratic initiatives on healthcare, the environment and financial services reform.
“It is significant,” said Bill Miller, the chamber’s political director. “Korea can happen if we work together.”
The U.S.-Korea Free Trade Agreement would eliminate tariffs on 95% of U.S. goods within five years of its signing and could boost U.S. exports by $11 billion annually, the International Trade Commission estimates. It would reduce trade restrictions and tariffs on U.S. auto and beef exports while continuing American tariffs on South Korean autos for a limited time.
Southern California would almost certainly be a major beneficiary. Nearly $16 billion in goods moved between South Korean and Southland ports in 2009. What’s more, the Los Angeles area is home to an estimated 600,000 Korean Americans, many of whom have strong business ties to their homeland and are heavily invested in the local economy.
Southern California’s entertainment industry also supports the pact, which would clamp down on unauthorized copying and sharing of music and videos in South Korea, where piracy is a serious problem.
The campaign for the trade agreement kicked off Monday at the Port of Long Beach. Han Duk-soo, South Korea’s ambassador to the U.S., climbed on a small launch with dozens of chamber representatives, congressional staffers and South Korean advisors to see firsthand the effects of trade on the local community.
Wearing red, white and blue buttons proclaiming “Pass the U.S. Korean FTA,” the delegation sailed past giant Hanjin shipping cranes and stacked shipping containers, with a determined optimism about the deal.
“I think we will have good results,” Han said. “We have very strong support from U.S. businesses, and even the congressmen who have a negative view on it are sincere in their efforts to listen.”
On his tour of the harbor, the ambassador passed by scrap-metal dealer SA Recycling, where cranes picked through piles of rusting parts on a giant dock. South Korean tariffs on scrap metal would drop to zero once the deal is passed, and a 6.5% tariff on recycled plastic would be phased out, said Chul Chung, chief economist with the Korea International Trade Assn.
“It’s not going to export jobs,” he said, watching the cranes toss metal into piles. “It will deepen the intra-industry relationships that are taking place right now.”
South Korea is the United States’ seventh-largest business partner; two-way trade reached $67 billion in 2009. The White House estimates the trade agreement could create 70,000 U.S. jobs by increasing demand for U.S. products in South Korea.
The accord has drawn criticism from some industrial-state Democrats worried about foreign competition. The United Steelworkers, the AFL-CIO and other industrial unions say that the pact could cost more American jobs and that they would keep pressure on Congress to reject it.
While the trade agreement gives South Korean manufacturers better access to the U.S. market, there is “insufficient assurance that the closed South Korean market will sufficiently open up to our auto exports and other manufactured goods, such as steel,” Leo W. Gerard, international president of the United Steelworkers, said in a statement.
“And while Korean workers at these companies in their home market benefit from union representation, their operations here in the United States actively and aggressively fight to deny workers their most basic labor rights,” Gerard said.
Although some labor groups, including the United Auto Workers, support the deal, business lobbyists say Obama’s vocal support of the pact in defiance of his labor constituents could signal a new era of cooperation between the White House and business.
On Friday, the president won kudos from industry leaders for naming General Electric Co. Chief Executive Jeffrey Immelt, a Republican, to head a White House economic advisory panel. The business community also hailed Obama’s appointment of William Daley as White House chief of staff. Daley, a former executive with JPMorgan Chase & Co., was former President Clinton’s point man on the North American Free Trade Agreement.
In backing the accord, Obama last month cited provisions that could result in gains for auto workers and agricultural exports, two areas where South Korea has historically placed high trade barriers.
“It will contribute significantly to achieving my goal of doubling U.S. exports over the next five years,” he said.
Although administration officials were not present during the Long Beach port tour, the chamber and White House are working together to build support for the plan. The lobbying campaign will soon head to more heavily unionized states, including Ohio and Pennsylvania, where opposition to the agreement is more pronounced. But the administration’s support will make stops in those states much easier, said Leslie Schweitzer, senior trade advisor to the chamber.
“When you have the support of the administration and Congress,” she said, “It makes it much easier to fight these local battles.”
