by ROBIN HAHNEL
The US Korea Free Trade Agreement.
Billed as a trip to win jobs for Americans at the last minute in the aftermath of the election debacle, Obama was particularly anxious for a photo op signing the US Korea Free Trade Agreement. However, the secret to so-called free trade agreements is that they are also, and often primarily, agreements that liberalize international investment. The truth is that trade liberalization has a minimal affect on jobs. Proponents emphasize jobs added in exporting industries but neglect to mention jobs lost in importing industries. While trade liberalization inevitably creates disruption in labor markets and “structural unemployment” as workers move from one industry to another, in the long-run the net effect on jobs is seldom large one way or another. However, liberalization of investment that is the unadvertised component of agreements that are always described as promoting more free trade invariably lead to significant job losses in the US. Therefore, the fact that Obama could not close the deal on the US Korea Free Trade Agreement was actually a godsend for hard pressed US workers, even if it was yet another political defeat for Obama and his Presidency.
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