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[Opinion] Obama’s Protectionism

Posted June. 03, 2008 03:36,   

한국어

Though the United States seems to be the incarnation of globalization and free trade, it also has a long history of protectionist trade policies. Professor Chang Ha-joon of University of Cambridge explains that the United States is a country whose growth has been nurtured by protectionism. “The United States in the 19th century was not only an iron fortress for protectionist policies but also the birthplace for protectionist thoughts,” he writes in one of his books “Kicking Away the Ladder.” At that time, the United States imposed a tremendous level of tariffs on imported goods as a result of pressure from interest groups and complex political bargaining.

In the 1930s, the United States turned to free trade as the basis for its trade policies, but did not hesitate to return to protectionism when its own interest was at stake. From the 1970s, the Republican Party took on a strong hue of free trade and the Democratic Party of protectionism. Labor unions are an important base of support for Democrats. Exemplary protectionist policies are the trade retaliation, based on Super 301, and the anti-dumping tariff, intended to protect its steel industry. In 1997, under Bill Clinton, the United States Trade Representative (USTR) succeeded in opening up the Korean car market with Super 301.

The day before yesterday, while giving a speech in South Dakota, Barack Obama, the leading presidential candidate for the Democratic Party, said, “While Korea is exporting hundreds of thousands of cars to America, the number of cars America exports to South Korea is less than 5,000.” His expressed negativity on the KORUS FTA followed a letter to President George W. Bush last month urging him not to submit the KORUS FTA for ratification, characterizing the trade agreement as “badly flawed.” Although it does appear to be a strategic comment aimed to win support from the labor unions in the automobile industry, it is also true that a significant portion of the population in the U.S. supports protectionism.

In a report publicized last month, the Federation of Korean Industries expressed concern that policies that reinforce Trade Adjustment Assistance, protecting U.S. industries and trade-protectionism, are anticipated in the event that the Democratic Party wins the presidential election. This should strengthen protection of the steel, textile, and other industries in which the United States is losing competitiveness, the organization noted. The Korean economy will be hard hit when the U.S., the biggest market in the world, implements protectionist policies on Korean products, such as automobiles, ships, semi-conductors, and consumer electronics. U.S. protectionism might be beneficial for its workers, but not for the economy as a whole. Korea should also avoid actions that can stimulate protectionism in the United States when negotiating trade.