Last week, Congress passed the long-pending trade deals with South Korea, Columbia and Panama. The trade deals with Columbia and Panama are no threat to the American economy at all. They’re small nations with population densities nearly identical to that of the U.S. and are capable of developing into high per capita consumption economies whose labor forces will be fully occupied providing for their own needs. They are no threat of becoming exporting powerhouses.
South Korea is an entirely different matter. With a population density 15 times that of the U.S. (and four times the population density of China), they’re a nation incapable of consuming anything other than tiny apartments, food and clothing, leaving them with a vast labor force utterly dependent on manufacturing for export. President Obama has said that he’d like to see Koreans driving Fords, Chevys and Chryslers, which would indeed be quite a feat since their roads are so over-crowded that, on a per capita basis, they don’t drive anything to speak of, being forced to rely instead on mass transit, bicycles and shoe leather. And if the president wanted to see Koreans driving American cars, why did he agree to an annual limit of 75,000 vehicles exported to Korea while leaving Koreans free to export as many cars as they want? Only an idiot would agree to such a deal. This is a deal sure to kill many more American jobs.
This pack of trade deals does offer a unique opportunity to track their effects from the beginning, and that’s exactly what I plan to do in order to prove my point. The following are charts of our balance of trade with each nation, dating back to 2001:
As you can see, while we have a nice surplus in manufactured goods with Columbia and Panama, we have a very large trade deficit in manufactured goods with South Korea, just as the disparities in population density would predict. These new trade deals will probably have little effect on the balance of trade with Columbia and Panama, but it’s easy to predict that the deficit with Korea will only worsen. It’s going to take a while for this to take effect. Maybe a couple of years or so. But it’ll happen. And, as it does, I’ll continue to chide Obama, even after he’s out of office in 2013, for viloating his campaign promise not to do any more job-killing free trade deals, because this is one that surely will kill American manufacturing jobs. Shame on you, Mr. President!
So watch for updates on our balance of trade with these three nations.