Oops! New Data Shows Korean Trade Pact Backfired; Auto Imports/Trade Deficit From Korea Skyrocketed

May 6, 2016

Pending Trans-Pacific Partnership Was Modeled After Flawed Korean Free Trade Agreement

WASHINGTON, DC — Congresswoman Marcy Kaptur (OH-9) joined several Members of Congress Thursday briefing reporters on newly-released trade data from the first four years following the enactment of the United States-Korea Free Trade Agreement. The data reveals that the U.S trade deficit with Korea has more than doubled, by 115%, and that the number of passenger vehicles from Korea has increased by an additional 597,607 vehicles since the U.S.-Korea trade pact was enacted.

“The U.S. trade deficit and the number of lost jobs have grown since the Korean Free Trade Agreement, especially in passenger vehicle manufacturing” said Congresswoman Kaptur. “Just look at the data.”

Source: Global Trade Watch; United States Customs Service; United States Department of Treasury

In the fourth year following the US-Korea Free Trade Agreement the U.S. trade deficit with Korea in passenger vehicles grew 66 percent, from a net deficit of 848,505 vehicles to 1,409,532 vehicles.

The U.S. imports of passenger vehicles from Korea have increased by 69 percent or by an additional 597,607 vehicles by the fourth year of the Korea FTA.

Source: Global Trade Watch; United States Customs Service; United States Department of Treasury

“We need intense, highly-focused scrutiny of the TPP, the Trans-Pacific Partnership,” continued Kaptur. “The American people deserve to know as much about proposed trade agreements as the 1700 lobbyists and influence-peddlers hired by corporations and multinational firms behind the TPP who receive regular briefings.”

The Obama Administration has repeatedly promised job creation as a result of the TPP. Yet, the increase in the U.S. trade deficit with Korea equates to the loss of more than 106,000 American jobs in the first four years of the Korea FTA, counting both exports and imports, according to the trade-to-jobs ratio formula that the Obama administration cites to promote the TPP deal, which is modeled after the US-Korea trade pact.

Additionally, according to Global Trade Watch, a non-profit organization which monitors trade data:

The U.S. goods trade deficit with Korea has increased 115 percent, or $16 billion, in the first four years of the Korea FTA (comparing the year before it took effect to the fourth year data).
Since the FTA took effect, U.S. average monthly exports to Korea have fallen in 11 of the 15 U.S. sectors that export the most to Korea, relative to the year before the FTA. Exports of machinery and computer/electronic products, collectively comprising 28.6 percent of U.S. exports to Korea, have fallen 22.6 and 6.6 percent respectively under the FTA.
The 115 percent surge in the U.S.-Korea goods trade deficit in the first four years of the FTA starkly contrasts with the 5 percent decrease in the global U.S. goods trade deficit during the same period.
While U.S. goods imports from the world have decreased by 6 percent, U.S. goods imports from Korea have increased by 19 percent, or $11.5 billion, during the FTA’s first four years.

Congresswoman Kaptur is a senior Member of the House Appropriations Committee, and a leading critic of the TPP, the US-Korea Free Trade Agreement, and the North American Free Trade Agreement (NAFTA).

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