The Truth about Trade
Dean is Chairman Emeritus of 'Truth About Trade & Technology, a nonprofit advocacy group led by a volunteer board of American farmers.
Editor's Note: We are saddened to hear of Dean Kleckner’s passing and extend our sympathies to his family and friends. The AgWeb staff is grateful to have had the chance to work with him.
Let's Get The Deal Done
Sep 01, 2010
By Bob Bowman – DeWitt, Iowa
When the Berlin Wall fell more than two decades ago, it fell fast--and the Cold War came to a quick and bloodless end. Even those who had anticipated the collapse were startled by the speed with which Communism crumbled.
North Korea’s days may be numbered as well. We don’t know when the horrible regime currently led by Dictator Kim Jong-ll will end. Some signs suggest that it could be soon. In photographs, Kim appears weak. There’s talk of a succession involving his untested son Kim Jong Un, raising the prospect of political destabilization in a country that has transferred power from one strongman to another precisely once since it was founded in 1948.
Some South Korean leaders are convinced that the end is near--and they want to prepare for the possibility of reunification. On August 15, South Korean president Lee Myung-bak proposed a special tax to finance the costs of integration. Analysts have said that although a combined Korea would deliver a peace dividend, it might also require the wealthier South Koreans to pay as much as $1 trillion as they try to lift up their impoverished countrymen.
For the United States, regime change in North Korea would remove an immediate threat to national security. It would also present an incredible economic opportunity--but only if we act to get hold of it now.
After the Berlin Wall tumbled down, the East and West Germans chose to reunify. The decision made sense: They were truly one people, cut off from one another by Soviet aggression following the Second World War. Yet the move was neither seamless nor free. A report last year said that West Germans have transferred nearly $2 billion to East Germany over the last 20 years.
No wonder the South Koreans want to start saving their wons. (A won is a Korean dollar.)
For Americans, South Koreans are important trading partners. This is especially true for farmers. Last year, we sold almost $4 billion in agricultural goods to them. Overall, South Korea was our sixth most important export market.
Korea will become even more important after reunification because suddenly we would have access to about 24 million new consumers in the northern half of the peninsula--roughly 50 percent more people than we can sell to right now.
Who can doubt that they’ll want the made-in-America products that their oppressors have denied them for generations?
They’ll certainly have some access to our goods. Continuing positive relations with South Korea will see to that. But there are also different levels of success. We can do well or we can do really well, depending on the choices we make right now.
The most important choice involves the U.S.-South Korea Free Trade Agreement, which has languished for three years as it waits for congressional approval. The Bush administration negotiated the deal but Congress never provided the up-or-down vote it had promised. Earlier this year, President Obama announced his support for the pact. He wants to double U.S. exports over the next five years and sees this agreement as a step toward reaching his goal.
President Bush and Obama may not agree on much--but they both appreciate our economic ties to South Korea. Now the White House must submit the pact and Congress must pass it.
The agreement is worthwhile with or without reunification. The best way for two countries or cultures to co-exist and prosper is through mutually beneficial trade.
We shouldn’t pass up the chance to improve trade with South Korea because more U.S. exports would mean more jobs for Americans during the worst recession of our lives. Our competitors haven’t ignored this opportunity. The European Union is about to close its own deal with South Korea.
Yet the looming possibility of Korean reunification makes an agreement more pressing than ever. The experience of Germany teaches us that if the government in Pyongyang implodes, it could happen without much warning.
The choice is to prepare for this possibility and be ready for it or to snub it now in the hope that we can play catch up later.
That’s no choice at all. Let’s get the deal done, while there’s still time.
Bob Bowman produces corn, soybeans, alfalfa, seed and specialty corn on a multigenerational farm near DeWitt, Iowa. Bob is a member of the Truth About Trade and Technology Global Farmer Network. www.truthabouttrade.org