President Obama's trip to Asia has been dominated by one central theme: the economy. After Americans overwhelmingly rejected the policies of his administration, the president was hoping to accomplish several objectives during the 10-day trip that would not only bolster the U.S. economy, but also show that Obama is able to reach out to Republicans on issues of foreign policy and free trade.
One of the most important objectives was a U.S.-South Korea free trade agreement. The President met with South Korea's President, Lee Myung-bak, shortly before the G20 summit to discuss a Bush-era free trade agreement that, according to the Wall Street Journal, would bolster U.S. exports and help reduce the United States' staggering $44 billion trade deficit.
The two nations, however, were unable to come to a consensus. This was largely due to the fact that several domestic lobbies in both countries were unhappy with some of the agreement's terms. In the U.S., companies like Ford felt the agreement didn't give them enough access to the Korean market. In Korea, many had difficulty with the U.S. expanding beef exports as many lawmakers in the nation were still upset over a 2003 outbreak of Mad Cow disease here in the States.
The failure to come to a consensus has larger implications for U.S. foreign economic relations. President Obama has made it a priority to double U.S. exports by 2015. This failure to reach an agreement reflects poorly on his administration and is a setback to accomplishing that goal. Moreover, the Obama administration has yet to negotiate any large deals with other countries regarding monetary policy or trade. As the largest economy in the world, the U.S. must continue to exert its economic influence globally. In today's hypercompetitive global economy, trade is becoming ever more important to maintaining a healthy national economy.
What's more troubling regarding his failure to come to an agreement is that Korea just passed a free trade deal with the European Union. Allowing trade competitors such as the EU to win trade agreements with countries like Asia and South America, will directly result in the loss of U.S. jobs. The U.S. Chamber of Commerce has estimated that if the Obama administration doesn't put some sort of trade deal together with Seoul before July, the U.S. may lose up to 340,000 jobs.
Other important issues are sure to come up during the rest of G20 meeting. President Obama met with German Chancellor Merkal, and China's President Hu Jintao to discuss, among other things, currency wars and the Federal Reserve's recent decision to inject $600 billion into the economy. For years, the U.S. now has been trying to get China to stop manipulating its undervalued Yuan. To this end, the U.S. has made some progress, but still has much to go. The President and his administration must continue to put pressure on the Chinese for the duration of the summit.
As Republicans prepare to take over the house, the Obama administration will find that the issue of free trade is one thing that Republicans and Democrats can and must find common ground on. While issues of deficit reduction and tax cuts will be a source of tension between the two parties, both sides currently recognize the need to reduce our trade deficit in a way that will benefit our economy and bring us closer with other nations.
While the president may not have succeeded in finding common ground with the Korean government on trade, it is imperative they continue to do everything they can to work out a deal. Other issues regarding foreign economic policy are no doubt important, but this agreement is vital to both our economy and our relationship with one of the most influential democracies in Asia. As students here at UW-Madison, it is important that we pay attention to these issues as they will one day directly impact us when we search for jobs.
Matt Payne is a junior majoring in Chinese and economics. We welcome all feedback. Please send responses to opinion@dailycardinal.com.
