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Being a former producer and avid listener of The Thom Hartmann Program, I agree with Thom’s position on regulated trade mostly. If it costs $1 to make a pair of shoes in America, and you go overseas and make the same exact shoes for $.05 you should be charged a $.95 tariff if you want to sell those shoes back to the American market.

That crazy cook in 1992, H. Ross Perot was right. NAFTA has been a disaster for American workers, and it hasn’t done much to improve the standards of living for Mexican workers. But that’s the silliness of the folks who chant “free trade, free trade” all the time when they mean free trade, or rather, wild trade, be given to only privileged sectors of the economy. If NAFTA was a real free trade agreement, Mexican workers would be allowed to cross the border into America as freely as American corporations can cross the border into Mexico.

So keep in mind that “free trade” is really just a marketing slogan.

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That being said, my feelings have been mixed about the KORUS FTA. South Korea is highly protectionist and nationalistic economically. I agree with Korea’s position to protect its rice market. It’s a long standing tradition that is not in a position to withstand competition from countries with different economies and standards of living. Thousands of years of tradition growing rice in Korea would be wiped out if it had to compete with South Asian growers who can greatly undercut them–not because they’re better but because they live in different economies where they don’t need to sell their rice for much money because their standards of living are far cheaper.

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Aside from the rice, South Korea has used high tariffs to protect produce sectors that barely even exist domestically, like cheese and wine. It’s like the U.S. trying to protect its kimchi producers.

So basically, this is the list of American products that will be duty-free in South Korea immediately, according to the KORUS FTA (thanks Marmot for the link)

  • Wheat
  • Feed corn
  • Soybeans for crushing (We may see a big stink about genetically altered soybeans from the U.S.)
  • Hides and skins (Leather, really)
  • Almonds
  • Pistachios
  • Bourbon whiskey (Woo hoo!)
  • Wine (Yea!)
  • Raisins (Who cares?)
  • Grape juice
  • Orange juice (Jeju Island may be upset about that one)
  • Fresh cherries
  • Frozen french fries (How did that get in there?)
  • Frozen orange juice concentrate
  • Pet food (Pet food in Korea is very expensive)

Within two years, the duties will be phased out of the following:

  • Avocados (What Korean avocado industry was it protecting before?)
  • Lemons
  • Dried prunes
  • Sunflower seeds

Included in the five year phase out will be these:

  • Prepared foods
  • Chocolate products
  • Sweet corn (Finally! There is no sweet corn in Korea. The stuff they serve on the streets is like the stuff we feed cattle.)
  • Sauces and preparations
  • “Other fodder and forage” (Stuff like alfalfa)
  • Breads and pastry (A little skeptical of breads imported from overseas. I don’t trust breads with shelf lives over a week.)
  • Grapefruit
  • Dried mushrooms

And now the tariff-rate quota goods (TRQs). I gather that these are products that were restricted importation through quotas, as in only so much was allowed in the country per year. Now instead of being restricted outright, a tariff will be placed on products after a certain number enter the country.

  • Powdered milk
  • Whey for food use (Ricotta cheese?)
  • Cheese (Just eliminate all the tariffs on that one, please!)
  • Dextrins and modified starches (Yawn)
  • Barley
  • Popcorn (There’s a quota on popcorn?)
  • Soybeans for food use

According to the document I’m reading, the market will be expanded (very abstractly worded) for the following:

  • Beef products
  • Pork products
  • Pears
  • Apples
  • Grapes
  • Oranges

Beef has been the major issue that has held up the agreement. In fact, despite what the document says, there hasn’t been a firm agreement on U.S. beef coming into South Korea. South Korea stopped importing U.S. beef in 2003 after there was a mad cow scare. So far, they have had restricted beef imports as long as there are no bone fragments in it.

Bone fragments?

I hate to say that this looks like the South Korean government being sneaky. According to beef producers, processing beef without any bone fragments is close to impossible. Besides, bone fragments in beef have little to do with mad cow disease. I have looked a good bit for a scientific claim that bones have anything to do with mad cow disease. If a cow is infected, the whole cow is infected. And it only comes from eating other cows.

I must say that the whole beef issue makes my brain hurt. I wonder how much the domestic Han-woo beef industry will be hurt by resumed U.S. beef imports. Can anyone fill me in on how things were before 2003?

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