“The only trade agreements I believe in are ones that put workers first – because trade deals aren’t good for the American people if they aren’t good for working people. That’s why I opposed CAFTA. That’s why I oppose the South Korea Free Trade Agreement. -Barack Obama on the campaign trail, 11/13/2007

Three years later, Obama is taking bows for that very same South Korea Free Trade Agreement, negotiated by George Bush in 2007.  He made a couple of changes that could potentially net the automakers a few hundred more jobs — but got no guarantees, and at the cost of hundreds of thousands of jobs.  And all the things he said he opposed in the deal, that were bad for American workers and the environment, like limiting our ability to regulate banks and forcing American taxpayers to submit to judgments made by World Bank and UN tribunals?   He didn’t touch those.

So what does this deal do?

Like NAFTA and CAFTA, the Korea FTA (KORUS):

  • Allows foreign corporations to operate inside the United States under privileged international trade agreements rather than having to obey our laws that apply to our businesses.
  • Prohibits us from limiting the size of banks — and thus we give up the right to decide what “too big to fail” is on our own shores
  • Prohibits us from banning risky financial goods and services (like derivatives trading), otherwise US taxpayers will have to pay compensation to international companies for the profits they won’t be able to steal reap from engaging in such transactions
  • Prohibits us from stopping capital transfers unless the IMF approves – even to fight money laundering and other financial
  • Bans the government’s ability to adopt “buy American” policies,  determining  how US tax dollars can be spent.
  • Limits what policies states and localities can establish over land use, and allows any such policies to be attacked in foreign tribunals if they do not conform to the trade pact’s constraints
  • Forces the United States to submit to the judgment of foreign tribunals
  • Elevates foreign corporations to equal status with the sovereign United States, empowering foreign companies with new rights to sue the U.S. government before the UN and World Bank tribunals, skirting US courts.

Think that can’t happen?  To date, US taxpayers have paid out over $400 million  in compensation to foreign corporations from such cases under NAFTA.  And we also spent million in legal costs even on cases we won, and there are billions more outstanding in unsettled cases. KORUS would extend that privilege not only to the 300 Korean establishment now in the United States –  but to any Chinese or other firms incorporated in Korea that operates here.

President Obama says he’s doing this to create jobs.  As Paul Krugman points out today, that’s hogwash.  This deal will not do that — it’s just NAFTA extended to another country, one with a huge manufacturing base.  Since NAFTA was enacted, more than 45,000 U.S. manufacturing facilities have closed nationwide, and 5.5 million manufacturing workers have lost their jobs. Currently, American workers suffer a $2000 annual net loss due to our trade policy — more than the average American’s federal tax burden.

The President is also claiming it will close the trade deficit.  In fact, the US trade deficit has exploded since NAFTA and WTO.  America has become the dumping ground for the world, and we now have a trade deficit of over 6% of GNP — going from $103 billion before 1993 to a peak of over $830 billion.

As President Obama well knew when he was on the campaign trail, NAFTA has been devastating to our workforce. Over 5.6 additional American jobs could have been supported had NAFTA and the WTO not led to increased trade deficits. EPI estimates that Obama’s KORUS deal could cost the loss of another 159,000 jobs — which is why Sherrod Brown, Mike Michaud and Linda Sanchez have all come out against it.

Sherrod Brown calls it a “dangerous mistake.”

With 15.1 million people currently unemployed in the United States, it is insane to extend the same NAFTA privileges to Korea that have already ransacked America’s manufacturing sector and our labor force.

Candidate Obama  knew that the way to curry favor with the public was to oppose NAFTA and CAFTA.  But privately, he had people calling the Canadian government to assure them it was all just “campaign rhetoric.” The campaign then denied those reports.

Well, I guess we know the truth now.  The President is doing just what Jamie Dimon and the Chamber of Commerce want — anything else was just campaign rhetoric.