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USTR’s Omissions and Data Distortions Aimed at Hiding the Dismal Realities of the Korea Free Trade Agreement

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The Office of the U.S. Trade Representative (USTR) has disseminated a press release riddled with false claims about the record of the U.S. “free trade” agreement (FTA) with Korea, which turned two years old in March 2014. The release attempts to obscure the fact that two years after the pact went into effect, the actual outcomes are exactly the opposite of the “more exports, more jobs” that the administration promised:2 According to the official U.S. government trade data provided by the U.S. International Trade Commission (USITC), U.S. average annual goods exports to Korea are down 5 percent, while imports from Korea have increased. The U.S. goods trade deficit with Korea has swelled 50 percent under the FTA’s first two years.

USTR’s primary data distortion is the decision to use figures that include what are called “reexports.” These are goods made abroad, such as in Canada, that are simply shipped through the United States en route to Korea. (For instance, the USTR figures would include as U.S. exports the goods taken off a truck from Canada in California’s Port of Long Beach and then shipped to their final destination in Korea.) Each month, the U.S. International Trade Commission removes re-exports, which do not support U.S. production jobs, from the raw data gathered by the U.S. Census Bureau. But USTR uses the uncorrected data, inflating the actual U.S. export figures.