In 1992, billionaire presidential candidate Ross Perot famously predicted a “giant sucking sound” if the North American Free Trade Agreement became law. The Labor Department (based on the number of workers certified as displaced by imports in the NAFTA Transitional Adjustment Assistance program) has estimated that NAFTA cost 525,000 U.S. jobs between 1994 and 2002.
Now the president announces a treaty proposal with South Korea that would be the largest since NAFTA in 1994, according to an Associated Press story. The president predicts that the agreement would support at least 70,000 jobs in the United States.
According to the Dec. 5 article, a 2.5 percent tariff on Korean cars would be lifted in five years, a tariff on Korean trucks would be phased out and South Korea would immediately eliminate its tariff on U.S. trucks in return for opening Korea’s markets to the United States.
In short, if the treaty is ratified, we would get the privilege of trying to sell in South Korea our goods, which are necessarily produced with our higher labor costs, while exposing our auto industry to cars and trucks produced by Korean workers earning less than U.S. wages.
The treaty still must be ratified by our Senate and I hope the senators demand proof that this one will work out better than NAFTA has. The U.S. needs an industrial policy that protects our jobs and industry from low-wage foreign competition if we are ever to regain our industrial strength and provide middle-class jobs.
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