Yesterday:
Yesterday, the Minister Counselor and I had lunch with two congressional staffers on the Ways and Means Committee. It was one of the more exciting days at work, and not just because we were at a restaurant! They talked mostly about the KORUS FTA, but I had a chance to ask some questions about the U.S. auto industry in general, and the politics surrounding the issue of free trade. Evan and Alex were both really nice and patiently answered all of my questions.
For example,
I was thinking that on the one hand, it is an awful time to approach the issue of free trade because people gravitate towards protectionist policies during recessions in an effort to boost domestic markets. On the other hand, it is a great time to ratify free trade agreements because the global community has become (painfully) aware of the degree to which our economies are linked. Paul Krugman didn't win the Nobel Prize for nothing, right?
However, President Obama seems to be preoccupied with Health Care reform and the Energy Bill, which are also really important.
I also met Edward Gresser yesterday! He made a really good point about how the U.S. has some contradictory policies when it comes to the auto industry. For example, there is a 25% tariff on light trucks, which acts as an incentive for automakers to produce more light trucks. However, the government is simultaneously trying to get automakers to produce more fuel efficient vehicles. Why not just get rid of that 25% tariff?
BTW, isn't it interesting that in 1930, there was a 70% tariff on magic tricks and practical joke items?! So silly!
In other news: Brad DeLong blogged about the Fed and Greenspan. Chanda and I love all things Alan Greenspan. We want to adopt him as our grandfather.
Today:
I finally finished a report that I have been working on for one of the diplomats at the Embassy. He's such an interesting character. I saw him one Monday and asked, "how was your weekend?" and his response was, "I went to an Aerosmith concert with my friend and we stayed out past 11 PM! I went because I don't know if I'll be able to go once I get a little older..."
HAHA. He's so funny!
Anyway, the report was on tax incentives that motivate employers to hire disabled workers. I won't bore you with the details, but basically, employers can receive tax credits for hiring disabled workers or for making their work place more accessible. The efficacy of these tax incentives are disputed, but there have been arguments that such incentives would distort the labor market and lead to" displacement" and "churning." Displacement is the discrimination against those who will not allow the employer to take advantage of disabled worker tax credits. Churning is the act of replacing older disabled workers with new ones such that the employer would qualify for more tax credits. However, in 2001, the GAO testified before the Committee on Ways and Means and stated that 93% of employers surveyed reported that displacement and churning have little to no cost-effectiveness. So, no such labor market distortions.
Someone at work today said, "I am amazed by the wonderful opportunities and programs that are available to the disabled people in the U.S. (compared to Korea.) But then I wonder, how can the same country have such bad health care?!"
Haha. I thought that was really funny.
Tomorrow:
Having dinner with DJ Nabs and his wife, Alaka, tomorrow! I can't wait to ask them about the IMF and the World Bank. They're so awesome. I'm jealous.
Showing posts with label KORUS FTA. Show all posts
Showing posts with label KORUS FTA. Show all posts
Tuesday, June 30, 2009
Friday, June 19, 2009
Crossword Puzzle #2!
HAPPY FRIDAY!!!
So much has been happening in DC! [Hillary hurting her elbow?! Hope she gets better soon!] There was the financial overhaul which included the death of the OTS, the scramble to cut costs from the health plan, the passage of the War Bill which included IMF funds, and the approval of the energy bill.
Today I went to the Korea Economic Institute for a panel lecture. The speakers were James Lister [VP of KEI], Minister Counselor Han [Korean Embassy], Subir Lall [IMF], and Leif Eskesen [IMF].
The IMF economists talked about why the fall of Lehman had such a profound effect on Korea's economy, even though its Korea's banks were relatively unexposed to bad derivatives. Korea is one of the most open economies in the world, and when investors pulled their money out of Korea, banks began to roll over their debt, and Korea was faced with a liquidity problem. Korea's economy is also heavily dependent on exports, and as global demand weakened, the volume of exports from Korea decreased.
But not to worry! Korea’s government reacted quickly and forcefully in order to prevent massive de-leveraging and subsequent adverse effects. It took measures to keep Korea’s banks highly capitalized, eased monetary policy, and increased fiscal stimuli as cross-border financing tightened. Although Korea recorded an economic contraction in Q4 of 2008, it recorded an expansion the following quarter, while many other advanced countries continued to contract. However, private demand must eventually take the place of fiscal spending, and Korea's economic recovery is largely dependent on a global economic recovery.
Minister Counselor Han then spoke about the benefits of the KORUS Free Trade Agreement and how the U.S. and Korea need to commit to free trade, especially during an economic downturn when protectionist policies can be particularly detrimental. Contrary to popular belief, the U.S. auto sector has much to gain from the KORUS FTA. KORUS FTA attempts to further level the playing field for U.S. made autos in Korea. Korea agreed to eliminate its 8% tariff on U.S. passenger cars immediately and to reduce non-tariff barriers to U.S. exported cars. Korea has also agreed to a “snap-back” policy which allows the U.S. to reinstate tariffs on Korean cars if Korea fails to uphold its commitments under KORUS FTA. Despite these conditions, the agreement continues to face opposition by many American carmakers.
M.C. Han pointed out that about 30% of the 675,139 Korean nameplate vehicles sold in the U.S. were produced within the United States, increasing employment in those regions where manufacturing plants were built. For example, the Hyundai plant in Alabama is a $1.4 billion investment that has created about 3,300 new jobs. The Kia plant in Georgia is a $1.23 billion investment that is predicted to generate about 2,500 new jobs.
He then held up this picture. That sign is on a lawn in Georgia.
Anyway, I got to ask Leif Eskesen questions later, and he was so nice! Maybe I should tell DJ Nabs to be friends with him.
So much has been happening in DC! [Hillary hurting her elbow?! Hope she gets better soon!] There was the financial overhaul which included the death of the OTS, the scramble to cut costs from the health plan, the passage of the War Bill which included IMF funds, and the approval of the energy bill.
Today I went to the Korea Economic Institute for a panel lecture. The speakers were James Lister [VP of KEI], Minister Counselor Han [Korean Embassy], Subir Lall [IMF], and Leif Eskesen [IMF].
The IMF economists talked about why the fall of Lehman had such a profound effect on Korea's economy, even though its Korea's banks were relatively unexposed to bad derivatives. Korea is one of the most open economies in the world, and when investors pulled their money out of Korea, banks began to roll over their debt, and Korea was faced with a liquidity problem. Korea's economy is also heavily dependent on exports, and as global demand weakened, the volume of exports from Korea decreased.
But not to worry! Korea’s government reacted quickly and forcefully in order to prevent massive de-leveraging and subsequent adverse effects. It took measures to keep Korea’s banks highly capitalized, eased monetary policy, and increased fiscal stimuli as cross-border financing tightened. Although Korea recorded an economic contraction in Q4 of 2008, it recorded an expansion the following quarter, while many other advanced countries continued to contract. However, private demand must eventually take the place of fiscal spending, and Korea's economic recovery is largely dependent on a global economic recovery.
Minister Counselor Han then spoke about the benefits of the KORUS Free Trade Agreement and how the U.S. and Korea need to commit to free trade, especially during an economic downturn when protectionist policies can be particularly detrimental. Contrary to popular belief, the U.S. auto sector has much to gain from the KORUS FTA. KORUS FTA attempts to further level the playing field for U.S. made autos in Korea. Korea agreed to eliminate its 8% tariff on U.S. passenger cars immediately and to reduce non-tariff barriers to U.S. exported cars. Korea has also agreed to a “snap-back” policy which allows the U.S. to reinstate tariffs on Korean cars if Korea fails to uphold its commitments under KORUS FTA. Despite these conditions, the agreement continues to face opposition by many American carmakers.
M.C. Han pointed out that about 30% of the 675,139 Korean nameplate vehicles sold in the U.S. were produced within the United States, increasing employment in those regions where manufacturing plants were built. For example, the Hyundai plant in Alabama is a $1.4 billion investment that has created about 3,300 new jobs. The Kia plant in Georgia is a $1.23 billion investment that is predicted to generate about 2,500 new jobs.
He then held up this picture. That sign is on a lawn in Georgia.
Anyway, I got to ask Leif Eskesen questions later, and he was so nice! Maybe I should tell DJ Nabs to be friends with him.
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