EU Grabs Korea Trade Pact That Was Ours

Free Trade: Europe just walked off with the second-biggest trade deal in history with South Korea, bringing a fresh $26 billion to both economies and extending their clout globally. It's a prize that could have been ours.

Welcome to the new America, the land of the left behind. As the Obama administration dithers for the eighth straight month about three pending free-trade treaties, those dust clouds you see are Europe taking off and running with the big one — South Korea.

Late Thursday, Europe completed a free-trade pact with Korea in which 99% of all tariffs will be scrapped within five years. The two blocs already do business totaling $98 billion, and this deal is expected to tack on another $26 billion.

Products affected include machine tool parts, pharmaceuticals and agricultural produce. All are goods that American companies also make, but they still shell out 56% in tariffs.

For Europe, the deal with Korea was easy. The U.S. had already negotiated a trade pact of its own that was ready to go in 2006. Details of the EU-Korea treaty are nearly identical, so it's obvious the Europeans just Xeroxed the U.S.-Korea pact and will now walk off with the spoils.

The EU-Korea treaty is the biggest since the 1994 North American Free Trade Agreement. South Korea is the world's 15th-largest economy, and the 27-nation European Union is the biggest bloc.

A U.S. in the throes of recession could use that kind of market opening. And with the dollar tumbling, it would be in the middle of an export boom if the treaty went through.

The EU-Korea pact is expected to take effect next June. Media reports say Congress won't take up U.S. free-trade agreements with Korea (or Colombia and Panama, for that matter) until 2011 at the earliest. That's time enough for Europe to snap up our market share. No wonder the Europeans are smiling.

This isn't the only thing they're cooking up. EU trade pacts are also in the works with India and the Asian Tiger states of the Association of Southeast Asian Nations (ASEAN) — Singapore, Malaysia, Vietnam, Brunei, Indonesia, the Philippines, Burma, Thailand, Laos and Cambodia. And talks with Pakistan (with a GDP ranked 48th) start Oct. 19.

Other nations are doing the same. China, Japan and South Korea are creating their own economic zone, South Korea and Colombia have begun talks for a free-trade pact, Korea is holding talks with Peru, and Australia is pushing for free trade with India.