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Ext: Trade

Various studies conclude that the agreement would increase bilateral trade and investment flows. The final text of the proposed KORUS FTA covers a wide range of trade and investment issues and, therefore, could have substantial economic implications for both the United States and South Korea. The agreement will not enter into force unless Congress approves implementation legislation. The negotiations were conducted under the trade promotion authority (TPA), also called fast-track trade authority, that Congress granted the President under the Bipartisan Trade Promotion Act of 2002 (P.L. 107-210).

SKFTA is vital for the US trade with soko-and despite what others claim- even the auto industry will benefit from it

Gomes 10- Texas A&M University - George Bush School of Government and Public Service, Social Science Research Network (Rafael G. 8/31/2010 "Trade Agreements with Colombia, Panama and South Korea: What are We Waiting for?" http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1675606 )PHS

South Korea Free Trade Agreement. Of the three countries with which the United States has a trade agreement pending, South Korea has the biggest market. The U.S. International Trade Commission estimated that if the agreement with South Korea had been implemented in 2008, it would have provided annual benefits to U.S. consumers of $1.8 billion to $2.1 billion dollars that year. Additionally, the Trade Commission estimates that the agreement would increase U.S. gross domestic product by 0.1 percent, or about $10 billion. [See the figure.] It has been argued that the South Korea free trade agreement is flawed, since it does not eliminate South Korea’s nontariff barriers to American automobile imports. Specifically, South Korea’s environmental regulations (low vehicle emission standards) make it difficult for American cars to enter the market. However, due to the elimination of tariff barriers, exports of passenger vehicles are expected to increase under the agreement, according to a 2007 Trade Commission report.

DOHA would create more US jobs and increase the GSP’s and national income.

UKINUSA’11, British embassy in the United States (The Doha Trade Round: what it can mean for the 50 states, http://ukinusa.fco.gov.uk/en/business/open-markets/dda-report-map, 7/26/11)

Successfully completing the Doha Trade Round is the overarching trade priority for the UK Government. It would deliver huge benefits not just to the United Kingdom, but to countries across the globe by creating new jobs and boosting incomes. In fact, it has the potential to increase global economic output by at least $170 billion per year. As British Prime Minister David Cameron has said, “Trade is the biggest wealth creator we’ve ever known. And it’s the biggest stimulus we can give our economies right now.” But the Prime Minister also cautioned that 2011 is a make-or-break year for Doha, which was launched nearly a decade ago. We can’t keep going around in circles. The United States stands to gain significantly from the Doha Round. We are pleased to present a study, commissioned by the British Embassy, that analyses the economic benefits of the Doha Round for the US and each of the 50 states. The study found that each US state would gain jobs and almost all states would see a boost to their Gross State Products (GSP) if the negotiations came to a successful completion. The Doha Round would increase US national income by $37.9 billion, and add 393,000 net jobs to the US economy..

Trade Impact Ext- Doha Good

Among representatives of the first group of experts are international economists Jagdish Bhagwati and Anne O. Krueger, who have strongly advocated that the United States and other national governments should not pursue FTAs at the expense of multilateral negotiations in the WTO. Bhagwati has concluded that FTAs are by definition discriminatory and therefore trade diverting. He argues that tariffs remain high on many goods imported into developing countries and even on some labor-intensive goods (such as wearing apparel and agricultural products) imported into developed countries. Consequently, he asserts, trade diversion will likely result when an FTA is formed.15 Both Bhagwati and Krueger cite the “rules of origin” and other conditions of an FTA’s establishment for strong criticism. Bhagwati claims, for example, that the rules of origin in one FTA more than likely do not coincide with the rules of origin in many of the other FTAs. Furthermore, he argues, the schedule of implementation of the tariff reductions and other conditions for one FTA will not match the schedule of other FTAs. The incongruity of these regulations across FTAs has created what Bhagwati sees as a customs administration nightmare and calls the “spaghetti-bowl” phenomenon.16

Many inputs for products come from producers outside of FTA, but if ftas and rules of origin continue, the quality of products will go down

Cooper, January 6, 2011, Specialist in International trade and finance (William H. Cooper, Free Trade Agreements: Impact on US Trade and Implication for US Trade Policy, http://www.strtrade.com/wti/2011/january/20/free_trade_agreements.pdf, July 26, 2011)

In her criticism, Krueger claims that in order to meet the input thresholds of rules of origin requirements, producers in one FTA partner will be encouraged to purchase as many inputs as possible from other partner countries, even if a non-FTA member can produce and sell the inputs more cheaply and even if the tariff rate on inputs from non-FTA producers is zero. Importing inputs from within the FTA to meet the rules of origin threshold allows the producer to sell the final product within the FTA duty free. Under such circumstances imports of inputs are diverted from efficient producers outside the FTA to less efficient producers inside the FTA. A corollary to Krueger’s conclusion is that the higher the threshold established in the rules of origin, the greater the chance that trade diversion will take place.17

WTO expresses concern over bilateral free trade agreements

Business World Online 7/20/11 (“WTO expresses concern over preferential accords” http://www.bworldonline.com/content.php?section=TopStory&title=WTO-expresses-concern-over-preferential-accords&id=35095) Accessed 7/26/11

BILATERAL or regional free trade deals need to be carefully considered to ensure that these don’t close off the conclusion of a wider multilateral agreement, the World Trade Organization (WTO) said. The prescription came as the Geneva-based WTO warned that global weakness would likely persist, despite a record-high trade increase of 14.% last year. It noted that policy-oriented preferential trade agreements (PTA) may have had an impact, but added that their increasing complexity also posed a challenge to the aim of reaching a global free trade deal. “[I]ntegration that goes beyond tariffs and other measures at national borders ... [which] increasingly include domestic policies such as regulations on services and investment, intellectual property protection and competition policy,” is the trend now for PTAs, it said. “[As] these deep PTAs reflect important changes in the world economy such as the growth of global production networks,” the WTO expressed concern over its role. There are currently some 300 preferential trade agreements that have been in force since 2010 and on average, a WTO member is party to 13 such deals. The trade agency noted the risk of a lock-in effect, which could become a stumbling block to multilateral cooperation.

DOHA would provide inordinately great benefits which would potentially be undermined by bilateral trade agreements such as SKFTA.

The passing of DOHA will lead to enormous benefits for food producers in the United States.

A comprehensive report from the Organisation for Economic Cooperation and Development (OECD) will encourage reticent American negotiators into striking a deal on global food liberalisation, saying US producers would gain US$500m from the reforms. As the long-running World Trade Organisation (WTO) Doha Development Round hopefully draws to a close this year, the OECD has concluded there are "net gains for each…type" of American primary food producer. "Global reform leads to increased world prices and higher US agricultural exports, due primarily to the removal of global tariffs", said the report 'agricultural policy and trade reform'. Prices for American beef, a key US sector, would probably rise significantly, said the OECD. And while larger farms, ranches, growers and livestock units would suffer losses from cuts to production subsidies, the report is optimistic about their ability to innovate and develop new income sources. Globally, the abolition of production subsidies, despite the parallel cut in tariffs, should lead to price rises, the OECD predicts. In its economic modelling, cheese, butter and powdered milk stand to rise the most - above 10% - while prices for other livestock and crop commodities are expected to increase 2-3%, with world prices for oilseed meal and oilseeds declining a little.