Many American Jobs on the Line, US Chamber Warns Over Stalled Trade Deal

By Patrick Goodenough | November 12, 2010 | 4:40 PM EST

President Obama listens to a speech by South Korean President Lee Myung-bak at a G20 working dinner in Seoul on Thursday, Nov. 11, 2010. (AP Photo/Yonhap News Agency)

( – The U.S. Chamber of Commerce has expressed disappointment that President Obama had been unable to finalize a long-stalled free-trade pact with South Korea during talks in Seoul. It urged speedy progress and warned that hundreds of thousands of “American jobs are on the line.”

“Time is of the essence,” president and CEO Thomas Donohue said in a statement Thursday. “Since South Korea will soon implement a similar arrangement with the [European Union], American workers stand to lose 340,000 jobs without this agreement.”

Conservative critics have blamed the delays in concluding the three-year old Korea-U.S. free-trade agreement (KORUS FTA) on leftist protectionism.

While in the Senate, both Obama and Hillary Clinton, now secretary of state, opposed the agreement negotiated by the Bush administration.

As president Obama has said he supports for the pact, but wants to see it improved.

Over the summer Obama said he wanted the deal sorted out by the time he visited Seoul for the G20 summit now underway.

But at a press conference Thursday he and South Korean President Lee Myun-bak said more work was needed to iron out differences still holding up the agreement.

Obama said negotiating teams on both sides have been asked to  would “work tirelessly” in the days and weeks ahead.

U.S. concerns about the deal have related primarily to Korea’s willingness to open its market to U.S. car and beef exports.

Proponents are concerned about the fact that, in the time since KORUS was signed, South Korea and the E.U. initiated, negotiated and signed a free-trade pact which is due to take effect in July 2011.

The U.S. Chamber said earlier that failure to implement KORUS while trading partners like the E.U. and Canada went forward with their agreements with Seoul “would lead to a decline of $35.1 billion in U.S. exports of goods and services to the world and U.S. national output failing to grow by $40.4 billion.”

“We estimate that the total net negative impact on U.S. employment from these trade and output losses would total 345,017 jobs.”

Donohue said Thursday the organization was ready to explain the benefits of KORUS to the American people and help move it through Congress.

“The sooner we get this deal done, the sooner it will start creating new American jobs.”


Signed in 2007 by President Bush and Lee’s predecessor, KORUS was hailed by U.S. negotiators as “the most commercially significant” free-trade agreement the U.S. had concluded in nearly two decades.

Opening South Korea’s market of 49 million consumers to American products and services, the agreement, worth some $68 billion in two-way trade, would be the biggest for the U.S. since the North American Free Trade Agreement with Canada and Mexico.

Labor unions in both countries have objected to terms of the pact.

The United Auto Workers union wants the entire deal renegotiated while the Korean Confederation of Trade Unions complained last month that the FTA was not being negotiated “in the interests of the people but under political intentions of intensifying the Korea-US military alliance.”

Some U.S. companies are also opposed. Ford Motor Co., which describes South Korea as “the most closed automotive market in the world,” ran full-page ads in American newspapers last week about the deal.

Chrysler Group CEO Sergio Marchionne in a statement Thursday said the company and its employees “greatly appreciate the strong commitment that President Obama and [U.S. Trade Representative Ron Kirk] have demonstrated to finalizing an enforceable agreement that provides meaningful market access for American-made vehicles in South Korea.”

Backing the agreement, on the other hand, is the U.S. beef producers’ marketing and trade body, the National Cattlemen’s Beef Association (NCBA).

“The KORUS FTA could potentially be one of the most significant bilateral agreements in our history,” NCBA president Steve Foglesong said last June.

He warned that if Australia, another major beef exporter, reached a deal with South Korea first, the results would be “devastating to the U.S. beef industry, and sadly, the losses would be of our own doing.”

‘The clock is ticking’

In Congress, opposition has come largely from Democrats.

Last month Rep. Mike Michaud (D-Maine) and 20 other member of the House, all Democrats, joined 35 Korean opposition lawmakers in sending a letter to Obama and Lee, urging them to modify the negotiated text to reflect the ideals of “alleviating poverty, advocating economic justice, promoting healthy communities, advancing human rights, and protecting the environment.”

(Five of the U.S. signatories will not be in the next Congress: Reps. Phil Hare (Ill.), Mary Jo Kilroy (Ohio) and James Oberstar (Minn.) lost their seats on Nov. 2, Rep. Bart Stupak (Mich.) is retiring and outgoing West Virginia Rep. Alan Mollohan was defeated in a Democratic primary earlier this year.)

Ahead of Obama’s trip to Seoul Heritage Foundation scholar Bruce Klingner urged the administration to “stop talking about free trade and begin implementing a trade policy.”

“On one side of the equation is the U.S.’s strongest ally in Asia and a critical trading partner, as well as the majority of U.S. manufacturing and service industries,” he wrote.

“On the other side are protectionist special interest groups. It is your choice, Mr. President, and the clock is ticking.”

Patrick Goodenough
Patrick Goodenough
Spencer Journalism Fellow