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The Democrats¡¯ overwhelming victory over the Republicans in U.S. midterm elections bodes ill for Korean exports to the U.S., pundits say, as the winners are more inclined to protectionist policies.
Lee Joon-gyu, a researcher at the Korea Institute for International Economic Policy (KIEP), says the Democratic Party blames the Republicans¡¯ ¡°wrong trade policies¡± for the U.S.¡¯ twin deficits in both budget and current account.
Trade Research Institute president Hyun Oh-seok says the Democrats could push Asian countries, especially Korea and China, to adjust their exchange rates to reduce the U.S.¡¯ current account deficit.
Democrat Congressman Charles Rangel, who is expected to lead the House Appropriations Committee, spared no criticism of the Bush administration in an interview with Reuters right after the election, saying the administration has not properly addressed trade and foreign exchange issues with China.
There are also fears that a Democrat-controlled Congress could derail negotiations for a Korea-U.S. free trade agreement. Lee said the U.S. will be less willing to concede in the FTA talks. Some analysts say Washington could take a hardline stance on anti-dumping and trade control measures, hot potatoes in Korea-U.S. trade talks, since the Democrats share basic philosophies with the trade unions.
However, few analysts expect seismic changes in overall U.S. trade policy. They say the Democrats can hardly pursue all-out protectionism in a global era when U.S, companies seek to conquer international markets. The U.S.¡¯ dependence on foreign trade rose from 15.7 percent in 1990 to 20.7 percent in 2005. Bark Tae-ho, a professor at Seoul National University¡¯s Graduate School of International Studies, expects the Democrats will not tinker with trade policies since the U.S. is after all seeking to clinch the FTA for its national interest.
(englishnews@chosun.com )
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