South Korea Free Trade Agreement key to prosperity and security

American manufacturers will then find themselves at a disadvantage compared to European producers — one estimate is a likely loss of roughly $30 billion in exports.  Frank Vargo, vice president of the National Association of Manufacturers, argued: “if the president sends the [U.S.-ROK] agreement up in early 2011, we will be able to avoid the export and job loss” that otherwise will result from the European pact.  If not, however, Prof. Choi Byung-il warns that the European agreement “poses a serious and substantial threat to the commercial interests of the United States, including automobiles, legal services, and accounting services.”

Yet the U.S.-ROK FTA sits unratified in Washington.

Expanding trade ties offers geopolitical advantages as well.  The Bush administration may have overstated the benefits, but only slightly, when it argued: “By boosting economic ties and broadening and modernizing our longstanding alliance, it promises to become the pillar of our alliance for the next 50 years, as the Mutual Defense Treaty has been for the last 50 years.”

Washington’s influence in East Asia is slowly ebbing.  And America’s military alliance, created in a different era, is obsolescent.  The two nations, once united by the threat of a dangerous North Korea backed by a hostile China and Soviet Union, now perceive regional threats differently.  The U.S. already has begun a force drawdown and a full withdrawal is becoming ever more likely.

To meet this challenge Washington needs to employ American “soft power” — access to the world’s most important, advanced, and productive economy.  Chinese influence will inevitably grow throughout East Asia.  But the U.S. need not yield the playing field; instead, it should actively engage friendly nations.  The most profitable and least dangerous means to do so is to make it easier for its people to trade.

Washington should press for multilateral agreements, particularly the long-stalled Doha round of the World Trade Organization.  Various nations also have expressed interest in a Trans-Pacific Strategic Economic Partnership, a Free Trade Area in the Asia Pacific, an East Asian Community, and other similar though differently-named groupings.  The U.S. government should respond positively to any and all.

Washington also should negotiate FTAs with Japan and Taiwan.  So too with ASEAN, the collection of highly-trade dependent Southeast Asian states which currently host nearly $300 billion worth of U.S. investment.

But the start is for Congress to ratify the trade accord with South Korea.  Failing to approve the South Korean FTA would likely result in permanent economic and geopolitical damage.  This would be a high price to pay at any time, but especially when China is rapidly expanding its influence throughout East Asia.

Doug Bandow is a Senior Fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author of several books, including Tripwire: Korea and U.S. Foreign Policy in a Changed World (Cato Institute) and The Korean Conundrum: America’s Troubled Relations with North and South Korea (co-author, Palgrave/Macmillan).