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''A Win-Win in Korea''

Washington Post, 02/03/06

Yesterday, the Bush Administration announced the launch of talks aimed at a free-trade area with South Korea. From extreme poverty 40 years ago, South Korea has risen to be the 12th-largest economy in the world; if the negotiators succeed, they will create the biggest free-trade zone since the North American Free Trade Agreement of 12 years ago.

Three economic studies suggest that a deal could boost incomes slightly in the United States and substantially in South Korea. But that would be only one of its advantages.

A deal would strengthen political relations with South Korea, a country that hosts US troops but whose long-term friendliness cannot be taken for granted. South Korea takes a more conciliatory view of North Korea's nuclear ambitions than does the United States, and it perceives less of a threat from China.

South Korea mistrusts Japan's pursuit of a permanent seat on the UN Security Council, whereas the United States favors it. A trade pact would introduce positive energy into a challenged alliance.

A pact might also help revive the Doha round of global trade talks. Some bilateral trade deals can divert energy from the big economic prize of multilateral liberalization, but that shouldn't be true here.

Rather, bilateral talks with the United States will push South Korea to open its markets to foreign services and farm goods - precisely the sectors South Korea would be called on to liberalize in a Doha deal.

So bilateral negotiations could offer South Korea a double incentive. Since Korean farmers have become the most flamboyant demonstrators at international trade meetings, anything that helps to bring their government along is welcome.

The two sides have been talking informally for a year; they would not have launched these talks unless the prospects for success looked reasonable. It's still possible that South Korea's government will lose the stomach for concessions; a recent exploration of a free-trade area with Switzerland collapsed for similar reasons.

But if the talks fail, it better not be for lack of US effort or because congressional leaders, who have offered bipartisan encouragement so far, get cold feet.

Outside a small number of sectors, such as textiles and steel, the US economy is already open to South Korean goods; the commercial and diplomatic wins easily outweigh the negatives. Moreover, the consequences of second thoughts would be severe.

Drawing South Korea into negotiations and then abruptly pulling back would only harm US diplomacy in one of the world's tensest regions.

Go back, or read the latest opinions:

''Resuscitating Trade''

New York Times, 07/13/06


''The Sky's the Limit''

Washington Post, 06/15/06


''About That Free Trade…''

New York Times, 05/15/06


''Trading Jobs''

Los Angeles Times, 04/19/06


''Misguided Backlash''

Los Angeles Times, 03/24/06


''A Flat Tax for Developing Countries''

Deepak Lal, The Cato Institute, 03/16/06


''Trade And the China Card''

Sebastian Mallaby, Washington Post, 03/06/06





 


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