John points to the good news that the U.S. and South Korea have reached a deal on revising their free trade agreement. The FTA is a boon for the U.S. in both economic and geopolitical terms for reasons which I detailed in a recent study for the Cato Institute.
Yet the administration deserves to be criticized for sacrificing American consumers for its union supporters. The revised agreement delays elimination of U.S. tariff on Korean autos. That hurts South Korean exporters, obviously, but U.S. car buyers as well. Not just those who buy South Korean cars, but all car buyers, who will end up paying higher prices in a marginally less competitive domestic market.
The deal demonstrates the political appeal of protectionism: tell auto workers that you are "protecting" their jobs while sticking it to consumers, who will have less money to spend on goods and services elsewhere in the economy.
The Bush administration got this issue right. For shame on President Obama & Co.
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