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Great op-ed by Ken Davis and Will Wilkin about the Korea-US trade treaty in Samford Advocate on Wednesday
Howard Richman, 3/21/2014

The op-ed (Conn. suffers losses under U.S.-Korea trade treaty) discusses the effects upon Connecticut jobs of the US.-Korea Free Trade Agreement. The authors are a former Assistant Secretary of Commerce who is also a former VP of IBM and the co-owner-operator of a solar company. They have founded an organization called "Balanced Trade Associates." That's an organization we'd like to join!

They take the Obama administration to task for misrepresenting the U.S.-Korea Free Trade Agreement and point out that the new agreement (Trans Pacific Partnership) being negotiated with 11 Asian countries is modeled upon that disaster. Here's how they begin:

Creating more American jobs should be Congress' priority, which is why we cannot afford any more-of-the-same trade deals.

The latest evidence: Two years after the Obama administration's major U.S.-Korea Free Trade Agreement (FTA) went into effect, new government data show U.S. monthly trade deficits with Korea have ballooned 47 percent relative to before the agreement, which represents the loss of at least 50,000 additional American jobs in the FTA's initial 24 months....

They point out that the agreement with Korea actually reduced U.S. exports to Korea:

Consider agriculture. Average monthly exports of U.S. farm products to Korea have fallen 41 percent under the FTA. U.S. average monthly poultry exports to Korea have fallen 39 percent, while pork and beef exports have declined 34 and 6 percent respectively. All told, U.S. meat producers have lost a combined $442 million in exports under the deal so far.

The auto industry, meanwhile, has been hit with a post-FTA flood of imports that has increased the average monthly U.S. automotive trade deficit with Korea by 19 percent. While about 125,000 more Korean-produced Hyundais and Kias were imported into the United States in 2013 (after the FTA) than in 2011 (before the FTA), sales of U.S.-produced Fords, Chryslers and Cadillacs in Korea increased by just 3,400 vehicles.

Meanwhile, the growth in U.S. services exports to Korea has dropped 24 percent under the FTA -- from an average quarterly rate of 3.0 percent in the year before the FTA to 2.3 percent since the deal's enactment.

In December, we wrote a commentary (Fast Track to a Bad Deal) in which we made some of the same points as Davis and Will. We elaborate upon the principal that balanced trade is the key to economic prosperity in our forthcoming book Balanced Trade to be published by Lexington Books in May. The United States needs agreements that insure balanced trade because when trade is balanced all parties benefit.

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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]