FTA

This is my attempt to understand the implications of the Free Trade Agreement between the U.S. and South Korea.

http://online.wsj.com/article/SB10001424052748703814404576000770853479388.html?mod=WSJ_World_LEFTSecondNews

Obama hails the FTA as a success, especially in creating new jobs.  Where will the new jobs come from?  Immediate attention goes to the bruised automobile industry.  However, I am not sure if Koreans are really keen on purchasing Fords and GMs over the European or Japanese brands, even if the American brands were $2000-3000 cheaper.  Rather, a major American gain will come from the agriculture industry.  My guess is that Koreans poised to tighten their belt in their own tough economy will guzzle up cheap American products after the tariff comes down (except for beef and rice, because they're supposedly protected).  Would this translate to more jobs in the States? Well, to the extent that the demand in production is met by seasonal and foreign-workers, there will be few permanent jobs created.  The American financial and investment sectors are also likely to see a boost, with less regulation on part of the Korean government.  This again may not give rise to a huge number of jobs, while large amounts of $ are expected to be gained.  High-tech equipment (e.g. medical and audiovisual) may sell more in Korea to the extent that equivalent technologies are not available in Korea.

It is hard to tell what Korea will gain from this agreement.  Tariffs on Korean automobiles imports are relatively low already and will be minimally impacted by the agreement.  Perhaps the Korean textile/apparel industry will see some light, but the last time I've seen a 'Made in Korea' apparel was a while back.  Korean consumers will buy cheaper produce and save some change, and Korean farmers will once again throw up their arms (or light a candle) in protest of Yankee goods...