Lawmakers also voted for long-pending free trade agreements (FTAs) with Colombia and Panama.
The FTA with South Korea, known as KORUS, is the biggest trade deal for the U.S. since the North American Free Trade Agreement with Canada and Mexico. Congress approved it one day before South Korean President Lee Myun-bak is scheduled to meet with Obama at the White House and address a joint session of Congress.
Obama and Lee had dinner Wednesday evening at a Korean restaurant in Northern Virginia. Seoul’s official Yonhap news agency said news of the Senate vote came through during the dinner (the House vote occurred several hours earlier), prompting applause.
The legislative process has been swift. Obama submitted the three agreements to Congress on Oct. 3. The House Committee on Ways and Means reported them favorably two days later and the Senate Finance Committee followed suit on Tuesday.
Although approved by large margins in both houses, the voting record in the House especially revealed the deep divide between proponents who see significant job-creating potential and critics who echo labor unions’ arguments that the FTAs are “bad for jobs, workers’ rights and our economy.”
In the House, 219 Republicans and 59 Democrats voted for the KORUS bill, while 21 Republicans and 130 Democrats voted against it. In the Senate, 37 Democrats and 45 Republicans voted “yes” for the deal with Korea, while 14 Democrats and one Republican (Sen. Olympia Snowe of Maine) voted “no.”
In the Panama FTA House vote, 234 Republicans and 66 Democrats voted for, and six Republicans and 123 Democrats voted against the measure; in the Senate’s 77-22 vote, the “no” votes all came from Democrats, plus independent Sen. Bernie Sanders (Vt.).
The Colombia FTA was approved in the House by 231 Republicans and 31 Democrats, while nine Republicans and 158 Democrats voted against it; the Senate approved the agreement by a 66-33 vote, with 30 of the “no” votes coming from Democrats, one from Sanders, and two from Republicans (Snowe and her colleague from Maine, Sen. Susan Collins.)
Reflecting the business/labor split over the agreements, U.S. Chamber of Commerce president and CEO Thomas Donohue said the passage “represents a victory for American workers, American competitiveness, and American leadership,” while AFL-CIO President Richard Trumka called the FTAs “the wrong medicine at the wrong time” and charged that they “put corporations over people and profits over prosperity.”
Good for jobs, bad for jobs
KORUS still awaits ratification in South Korea, where the left-leaning opposition Democratic Party wants the agreement renegotiated, claiming it lacks sufficient support for the Korean agricultural sector. Once ratified the deal would also necessitate the revision of about a dozen laws. The two governments would both like to see the deal take effect by January.
The Korea Chamber of Commerce and Industry and other business bodies in a joint statement Thursday urged lawmakers in Seoul to act quickly. They cited analysis saying the FTA could create 350,000 new jobs in the country and boost South Korea’s GDP by more than five percent in 10 years.
As for the U.S., the International Trade Commission has estimated that KORUS tariff cuts would result in an increase in U.S. exports to Korea by $10 billion to $11 billion. According to the Office of U.S. Trade Representative Ron Kirk the deal “will secure at least 70,000 American jobs supported by those exports – as well as the additional American jobs that will come from by breaking down non-tariff barriers keeping U.S. exports out of South Korea, and by requiring stronger protection and enforcement of intellectual property rights in South Korea.”
AFL-CIO president Trumka favors the view of the Economic Policy Institute, a liberal think tank, which has predicted the FTA with Korea could cost 159,000 American jobs.
For its part, the U.S. Chamber has warned that 380,000 American jobs are at risk if the three FTAs are not implemented.
The long wait has been frustrating for KORUS proponents, especially those on the U.S. side who watched a South Korea-European Union FTA go into effect last July.
Secretary of State Hillary Clinton praised Wednesday’s development.
“The stakes are not just economic,” she said. “South Korea, Colombia and Panama are three important partners in strategically vital regions. With the passage of these agreements, America has delivered for our friends and allies.”
Also seeing broader foreign policy benefits, Rep. Ileana Ros-Lehtinen (R-Fla.), chairwoman of the House Foreign Affairs Committee called the three countries critical U.S. allies in regions “where American strategic interests are facing increasing challenges.”
“Colombia has served as a strong ally in the region to combat violent extremists and drug trafficking. This week’s events illustrate the importance of partnering with responsible allies in the Western Hemisphere to counter these threats to regional stability and U.S. national security,” she said – a reference to the alleged Iranian terror plot.
“With China expanding its commercial and diplomatic ties with anti-American regimes in the region such as Venezuela, U.S. alliances with stable democracies in the region such as Colombia and Panama are even more critical,” added Ros-Lehtinen. “Similarly, China’s aggressive policies in the Pacific make our alliance with South Korea as important as ever.”
The Bush administration signed an FTA with Colombia on November 22, 2006, with Panama on June 28, 2007, and with South Korea on June 30, 2007.