If the White House is committed to free trade, it needs to step up and complete several agreements left over from the Bush administration.
President Barack Obama, who hasn't talked much about trade since he took office, could notch a relatively easy win by fast-tracking the South Korea-U.S. free trade agreement, a deal that has been on hold for two years.
Richard Fisher, a former deputy trade representative and now president of the Federal Reserve Bank of Dallas, said the world is watching for signs of free-trade leadership. It would be a mistake, he said, if inaction signals "a tolerance for protectionism." In global trade, it is important that the U.S. "pick where to send the signals and be proactive."
That's why pursuing the South Korea deal makes enormous sense. The two countries have close economic and military ties dating to the Korean War, including thousands of U.S. troops still stationed there. Sticking points, like disagreement on the imbalance of automobile trade and Korea's ban on certain shipments of U.S. beef, aren't insurmountable, Fisher said.
South Korean Trade Minister Jong-hoon Kim was in Washington last week for talks with trade representative Ron Kirk, the former Dallas mayor. This wouldn't have happened unless both sides really wanted this agreement to advance. News reports in Asia indicate that Korea is willing to work with the U.S. on changes involving the cars and cattle to prevent the entire deal from stalling again.
South Korea is America's seventh-largest trade partner, and the nations generate more than $83 billion in two-way trade. Completing this deal, the biggest since NAFTA, could increase annual U.S. exports to Korea by about $11 billion and U.S. gross domestic product by about $12 billion annually.
Inaction - or worse, congressional refusal to ratify this agreement - would signal protectionism and place the U.S. at a competitive disadvantage around the globe. South Korea is finalizing a similar trade agreement with the European Union and pursing favorable trade terms with China and Japan.
Once the Obama administration makes this relatively easy deal happen, it should turn quickly to completing stalled trade pacts with Panama and Colombia. Free trade prospects are particularly promising with Panama because voters recently defeated the main impediment to the deal.
BOTTOM LINE: Strengthen U.S. policy in Asia and U.S. military and economic alliance with Korea.