FTA?
Dear Reader,
Here is a little thing I wrote about the then-pending Free Trade Agreement negotiations between the U.S. and South Korea. I originally posted it, on February 18, on my friend Shannon Powell's American Democracy Project site, which can be accessed through Facebook. It is now outdated--a deal has been signed, it now awaits only Congressional approval. Please read this, and then read my next post:
I had been in favor of the Korean/U.S. FTA--from both the Korean and American perspectives--until I read this excellent article by Michael Pollan in the NY Times Magazine. The article, "Unhappy Meals", does not mention Korea or international trade at all, but Pollan's arguments about healthy eating changed the way I thought about the FTA debate.
First, some background. Korea and the U.S. are on their seventh round of negotiations. They are hoping to finalize by March of this year because the Bush administration's ability to negotiate a trade agreement without Congressional input expires in July. This "fast track" authority forces Congress to simply vote yea or nae on the finalized FTA; it is not allowed to tinker with it or attach its own provisions. This obviously speeds up the process considerably. If the FTA misses the July deadline, it will be a long time before its details can be worked out. In the meantime, Bush is trying to renew this fast track authority.
As the NYT notes: "The talks stalled over United States requests for greater access for American cars, rice and drugs, and over South Korea's demand that Washington change antidumping rules applied to South Korean steel, cars, computer chips and textiles." (Choe Sang-Hun, January 16, 2007). Antidumping rules are much-criticized duties placed on goods imported to the U.S. that are considered to be unfairly priced--either sold below-cost or below-market because they were subsidized at home. Many potential and current trade partners consider antidumping rules to be hypocritical protectionism--this is a big issue, but one I will avoid for the moment. Look here for some good info.
While the FTA is a huge issue in Korea, it is often overlooked in the U.S. (It has only been mentioned 5 times in the NYT in the past year.) This is a mistake, I think, not so much because the U.S. has a lot to gain economically but because it has a lot to lose politically. South Korea has long been an important ally in East Asia, but lately it has been distancing itself. An FTA would help to shore up a fraying relationship. Moreover, after the failure of the Doha round of WTO talks, the U.S. is looking particularly protectionist and, frankly, petty on trade issues. (This from a Republican administration!) Failed negotiations with Seoul would send another bad message to the world.
And until lately, I thought that an FTA would benefit Korea as well. There would be an immediate GDP increase, and most likely an increase in foreign direct investment. After 30 years of fast climbing, Korea's growth seems to have stalled leaving it just ahead of Canada (11th in the world) in terms of GDP, and only $24,000 per capita. If Korea wants to officially break into the upper eschelon, it needs exports, exports, exports. To this end, (and because a comprehensive world trade policy has not been established) Korea has been pursuing FTAs with many different countries and trading blocs. Korea has finalized bilateral trade agreements with Chile, Singapore, and the European Free Trade Association (Switzerland, Norway, Iceland and Lichtenstein), and is exporting similar agreements with China, the EU, and Mercosur, along with the U.S. Any FTA will buy Korea's major exports--cars, steel, cell phones, ships--more market space, but one with the U.S. will be especially profitable, since the U.S. consumer appetite is so large and since Korea already has established brands in the U.S. that would suddenly be able to compete better (e.g. Samsung, Hyundai, Kia).
So what's the downside? Some people worry about GM or Ford gobbling up market share in Korea, but this seems highly unlikely. For one thing, the gains made by Hyndaie and Kia in the U.S. are likely to vastly outweigh potential losses to American brands at home. And Koreans are notorious for buying only Korean products. (See dip in import consumption around 1996-98 crisis.) GM has already managed to gain access to the Korean market, by buying Daewoo motors out of bankruptcy, but this just caused Koreans to be skeptical of Daewoo. And, I seriously doubt Ford's capability to capitalize on any opportunity presented to them. Toyota cars manufatured in the States would be left out of the agreement.
The big U.S. imports that would benefit are foods and drugs. Korean farmers--most of whom own small plots of land scattered between mountains and high-rise apartment buildings, personally selling their product at small markets in Seoul and other cities--would be seriously pinched by cheap U.S. imports of rice and beef and vegetables. Korean consumers, on the other hand, would get access to a wider variety of produce and processed food for cheaper prices. Bananas used to be only for rich people--until Dole and Del Monte started importing them from the Philippines. Now you can get a dozen for about a dollar fifty. Something similar would happen to foods like beef and asparagus that are now largely unavailable or very expensive.
So, a fair trade off, right? I mean, Korea gains GDP but loses its farms to the free market--and consumers benefit across the board and on both sides of the Pacific. Well, Korean farmers don't think so--they hold protests in Seoul almost weekly. But all Koreans would be affected. They would be eating differently. By losing their farms, they'd be losing their food--they would start to eat just like the U.S. They would lose, in a very concrete sense, their culture. This is what people mean when they talk about globalization's leveling effects and cultural meddling.
Is that so bad? Well, here's where Michael Pollan comes in. His argument, in "Unhappy Meals" is that the quality and complexity of American food has been subtly decreasing since the 1950s leading to unforeseen consequences in the population's health. Farms and food companies started finding cheaper and easier ways to make food that tasted good--from artificial flavoring to chemical fertilizers. While making food cheaper, it has been disastrous for quality. Pollan says "Since the widespread adoption of synthetic nitrogen fertilizers in the 1950s, the nutritional quality of produce in America has, according to U.S.D.A. figures, declined significantly."
The idea of nutrition has developed in tandem with the science of food production, convincing us to focus on the elements of the food we eat rather than the whole. We started eating protein instead of grilled steak or poached fish, eating carbs instead of bread or pasta. This allowed manufacturers to break foods down to their simplest components, simplifying the production process--and our diets. Simpler food is cheaper food, but if all we need is protein it should still be healthy food. Pollan argues that, given our declining heath, there must be something crutial, overlooked by nutritionists, left out of our diets. Our bodies have not learned how to cope with these changes and deficiencies.
My Korean acquaintance explained that when you are making kimchi (the Korean national dish, a sort of spicy sourkraut) or any other Korean food, the ingredients matter. Kimchi made with Chinese cabbage is just not the same as that made with Korean cabbage. You can taste the soil in the food, she said. If anything is different, the dish wont come off. Koreans have been cooking with food grown in Korean soil for thousands of years--they know what they are dealing with.
Pollan corroborates what, at first, sounded nationalistic or merely superstitious: "When the soil is sick or in some way deficient, so will be the grasses that grow in that soil and the cattle that eat the grasses and the people who drink the milk."
An influx of food from the U.S., if it threatens the current small-farm system, will change everything about Korean cuisine--not just the types of food used but the soil it is grown in, the flavor as well as the chemical, "nutritional" content. To be fair, Korea's small farms might be overrun even if there is no FTA. But let's stick to the subject: Should Koreans support the FTA?
Pollan advises, among other things, that we try to eat more like people from countries whose cuisines have been unchanged (mostly) for hundreds or thousands of years--for example, France, Japan, Greece, and Korea. By extension, these countries should try their hardest to avoid eating more like us.
Pollan notes "We think of culture as a set of beliefs and practices to help mediate our relationship to other people, but of course culture (at least before the rise of science) has also played a critical role in helping mediate people's relationship to nature. Eating being a big part of that relationship, cultures have had a great deal to say about what and how and why and when and how much we should eat." An FTA with the U.S. will fundamentally change what Koreans eat, will fundamentally alter their culture. And if our increasing levels of heart disease and diabetes are a product of our changed food supply, an FTA could be seriously detrimental to Koreans' health. Forget about GDP, Korea should avoid opening their market to American food products at all costs, even if this means abandoning the FTA. Koreans should not support an FTA with the U.S., and should even consider, perhaps, adding tariffs.
The U.S., for its part, needs to figure out ways to conduct diplomacy with its pen. We should sign an FTA even if it means allowing Korea to maintain protections on food products. But good luck slipping an Agreement of this sort past the farm lobby in Congress.
Here is a little thing I wrote about the then-pending Free Trade Agreement negotiations between the U.S. and South Korea. I originally posted it, on February 18, on my friend Shannon Powell's American Democracy Project site, which can be accessed through Facebook. It is now outdated--a deal has been signed, it now awaits only Congressional approval. Please read this, and then read my next post:
I had been in favor of the Korean/U.S. FTA--from both the Korean and American perspectives--until I read this excellent article by Michael Pollan in the NY Times Magazine. The article, "Unhappy Meals", does not mention Korea or international trade at all, but Pollan's arguments about healthy eating changed the way I thought about the FTA debate.
First, some background. Korea and the U.S. are on their seventh round of negotiations. They are hoping to finalize by March of this year because the Bush administration's ability to negotiate a trade agreement without Congressional input expires in July. This "fast track" authority forces Congress to simply vote yea or nae on the finalized FTA; it is not allowed to tinker with it or attach its own provisions. This obviously speeds up the process considerably. If the FTA misses the July deadline, it will be a long time before its details can be worked out. In the meantime, Bush is trying to renew this fast track authority.
As the NYT notes: "The talks stalled over United States requests for greater access for American cars, rice and drugs, and over South Korea's demand that Washington change antidumping rules applied to South Korean steel, cars, computer chips and textiles." (Choe Sang-Hun, January 16, 2007). Antidumping rules are much-criticized duties placed on goods imported to the U.S. that are considered to be unfairly priced--either sold below-cost or below-market because they were subsidized at home. Many potential and current trade partners consider antidumping rules to be hypocritical protectionism--this is a big issue, but one I will avoid for the moment. Look here for some good info.
While the FTA is a huge issue in Korea, it is often overlooked in the U.S. (It has only been mentioned 5 times in the NYT in the past year.) This is a mistake, I think, not so much because the U.S. has a lot to gain economically but because it has a lot to lose politically. South Korea has long been an important ally in East Asia, but lately it has been distancing itself. An FTA would help to shore up a fraying relationship. Moreover, after the failure of the Doha round of WTO talks, the U.S. is looking particularly protectionist and, frankly, petty on trade issues. (This from a Republican administration!) Failed negotiations with Seoul would send another bad message to the world.
And until lately, I thought that an FTA would benefit Korea as well. There would be an immediate GDP increase, and most likely an increase in foreign direct investment. After 30 years of fast climbing, Korea's growth seems to have stalled leaving it just ahead of Canada (11th in the world) in terms of GDP, and only $24,000 per capita. If Korea wants to officially break into the upper eschelon, it needs exports, exports, exports. To this end, (and because a comprehensive world trade policy has not been established) Korea has been pursuing FTAs with many different countries and trading blocs. Korea has finalized bilateral trade agreements with Chile, Singapore, and the European Free Trade Association (Switzerland, Norway, Iceland and Lichtenstein), and is exporting similar agreements with China, the EU, and Mercosur, along with the U.S. Any FTA will buy Korea's major exports--cars, steel, cell phones, ships--more market space, but one with the U.S. will be especially profitable, since the U.S. consumer appetite is so large and since Korea already has established brands in the U.S. that would suddenly be able to compete better (e.g. Samsung, Hyundai, Kia).
So what's the downside? Some people worry about GM or Ford gobbling up market share in Korea, but this seems highly unlikely. For one thing, the gains made by Hyndaie and Kia in the U.S. are likely to vastly outweigh potential losses to American brands at home. And Koreans are notorious for buying only Korean products. (See dip in import consumption around 1996-98 crisis.) GM has already managed to gain access to the Korean market, by buying Daewoo motors out of bankruptcy, but this just caused Koreans to be skeptical of Daewoo. And, I seriously doubt Ford's capability to capitalize on any opportunity presented to them. Toyota cars manufatured in the States would be left out of the agreement.
The big U.S. imports that would benefit are foods and drugs. Korean farmers--most of whom own small plots of land scattered between mountains and high-rise apartment buildings, personally selling their product at small markets in Seoul and other cities--would be seriously pinched by cheap U.S. imports of rice and beef and vegetables. Korean consumers, on the other hand, would get access to a wider variety of produce and processed food for cheaper prices. Bananas used to be only for rich people--until Dole and Del Monte started importing them from the Philippines. Now you can get a dozen for about a dollar fifty. Something similar would happen to foods like beef and asparagus that are now largely unavailable or very expensive.
So, a fair trade off, right? I mean, Korea gains GDP but loses its farms to the free market--and consumers benefit across the board and on both sides of the Pacific. Well, Korean farmers don't think so--they hold protests in Seoul almost weekly. But all Koreans would be affected. They would be eating differently. By losing their farms, they'd be losing their food--they would start to eat just like the U.S. They would lose, in a very concrete sense, their culture. This is what people mean when they talk about globalization's leveling effects and cultural meddling.
Is that so bad? Well, here's where Michael Pollan comes in. His argument, in "Unhappy Meals" is that the quality and complexity of American food has been subtly decreasing since the 1950s leading to unforeseen consequences in the population's health. Farms and food companies started finding cheaper and easier ways to make food that tasted good--from artificial flavoring to chemical fertilizers. While making food cheaper, it has been disastrous for quality. Pollan says "Since the widespread adoption of synthetic nitrogen fertilizers in the 1950s, the nutritional quality of produce in America has, according to U.S.D.A. figures, declined significantly."
The idea of nutrition has developed in tandem with the science of food production, convincing us to focus on the elements of the food we eat rather than the whole. We started eating protein instead of grilled steak or poached fish, eating carbs instead of bread or pasta. This allowed manufacturers to break foods down to their simplest components, simplifying the production process--and our diets. Simpler food is cheaper food, but if all we need is protein it should still be healthy food. Pollan argues that, given our declining heath, there must be something crutial, overlooked by nutritionists, left out of our diets. Our bodies have not learned how to cope with these changes and deficiencies.
My Korean acquaintance explained that when you are making kimchi (the Korean national dish, a sort of spicy sourkraut) or any other Korean food, the ingredients matter. Kimchi made with Chinese cabbage is just not the same as that made with Korean cabbage. You can taste the soil in the food, she said. If anything is different, the dish wont come off. Koreans have been cooking with food grown in Korean soil for thousands of years--they know what they are dealing with.
Pollan corroborates what, at first, sounded nationalistic or merely superstitious: "When the soil is sick or in some way deficient, so will be the grasses that grow in that soil and the cattle that eat the grasses and the people who drink the milk."
An influx of food from the U.S., if it threatens the current small-farm system, will change everything about Korean cuisine--not just the types of food used but the soil it is grown in, the flavor as well as the chemical, "nutritional" content. To be fair, Korea's small farms might be overrun even if there is no FTA. But let's stick to the subject: Should Koreans support the FTA?
Pollan advises, among other things, that we try to eat more like people from countries whose cuisines have been unchanged (mostly) for hundreds or thousands of years--for example, France, Japan, Greece, and Korea. By extension, these countries should try their hardest to avoid eating more like us.
Pollan notes "We think of culture as a set of beliefs and practices to help mediate our relationship to other people, but of course culture (at least before the rise of science) has also played a critical role in helping mediate people's relationship to nature. Eating being a big part of that relationship, cultures have had a great deal to say about what and how and why and when and how much we should eat." An FTA with the U.S. will fundamentally change what Koreans eat, will fundamentally alter their culture. And if our increasing levels of heart disease and diabetes are a product of our changed food supply, an FTA could be seriously detrimental to Koreans' health. Forget about GDP, Korea should avoid opening their market to American food products at all costs, even if this means abandoning the FTA. Koreans should not support an FTA with the U.S., and should even consider, perhaps, adding tariffs.
The U.S., for its part, needs to figure out ways to conduct diplomacy with its pen. We should sign an FTA even if it means allowing Korea to maintain protections on food products. But good luck slipping an Agreement of this sort past the farm lobby in Congress.
posted by Brian at 3:40 PM
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