More Bad News for U.S. Exports under Korea FTA
Newly-released government data reveals that U.S. exports to Korea continue to plummet after eight months of implementation of the U.S.-Korea "free trade" agreement (FTA). Despite Obama administration promises that the NAFTA-style pact would boost U.S. exports (and thus jobs), U.S. exports took a dramatic plunge after the deal took effect in March 2012, and have continued the downward trajectory since (as we've reported here, here, and here). Under the FTA, U.S. goods exports to Korea have declined by nine percent (a decrease of more than $2.5 billion) in comparison to 2011 levels for the same months. The post-FTA export plunge is indicated by the blue line in this graph:
Ironically, some of the biggest downfalls in U.S. exports to Korea have occurred in the automotive and meat industries—the two sectors that the Obama administration promised would experience particularly strong export growth under the deal. Compared with the pre-FTA levels of 2011, here's the FTA's legacy thus far in these key sectors:
- U.S. auto exports have declined by 1 percent ($11.7 million) while imports of cars and auto parts from Korea have soared 17 percent ($1.8 billion) resulting in a 19 percent increase in the U.S. automotive trade deficit with Korea.
- U.S. beef exports have fallen by 13 percent under the FTA, a $50 million loss.
- U.S. pork exports have dropped by 20 percent under the FTA, a $52 million loss.
- U.S. poultry exports have plummeted by 40 percent under the FTA, a $36 million loss.
In just the first eight months of the FTA, the decisive fall in U.S. exports to Korea has contributed to a 21 percent increase in the U.S. trade deficit with Korea, in comparison to the same period in 2011 (indicated by the increased red area in the graph above). Using the same ratio employed by the Obama administration, this trade deficit expansion implies the net loss of over 16,000 U.S. jobs under the pact's first several months.
Amazingly, the administration is still trying to sell the Trans-Pacific Partnership, the NAFTA-esque successor to the Korea FTA, with the same tired shtick used for the Korea deal: FTA = exports = jobs. How far will exports have to fall before this data-defying talking point can be put to rest?