Thursday, December 13, 2012

Remember how the S. Korea trade deal was supposed to increase U.S. exports?

It didn't.

U.S. exports to South Korea fell 3 percent in October over October 2011. Imports from South Korea rose 3.4 percent for the same period.

Public Citizen explains (note: FTA is jargon for "free trade agreement"):
In comparison with the FTA-free month of October 2011 (after adjusting for inflation), this FTA-encumbered October saw 3% fewer exports to Korea, 3.4% more imports from Korea, and a 20.4% jump in the U.S.-Korea trade deficit.   For the full seven months since the FTA's implementation for which data is available, exports have fallen 7.5%, imports have risen 0.4%, and the deficit has widened 23.3% in comparison to 2011 levels.  That's bad news for U.S. job creation--the promise under which the Obama administration sold this NAFTA-style deal.  
The falling exports are particularly disconcerting.  While, the U.S. has yawning trade deficits with many countries, exports to those countries tend to still rise, though overshadowed by even larger increases in imports.  Under the Korea FTA, exports have actually been falling in real terms in comparison to 2011.  Indeed, most of the deepening deficit under the FTA can be explained by reduced exports rather than increased imports.
We hate to say we told you so.