Earlier this week, the Congress passed free trade agreements with Columbia, Panama and South Korea. Passage may be hailed as a political achievement for promoting principals of free trade and for shoring up allies. Unfortunately, it will not do much to help our economy. This is because these three countries are quite small and Columbia and Peru are quite poor. That being said, it may boost GDP by 0.1%, or $15 billion.
Tag Archives: South Korea
Food is Expensive
In poor countries people spend much more on food than we do. In the Philippines 47% of income is spent on food. The amount is 45% in India, 40% in Vietnam, 36% in Indonesia, 33% in Thailand, 30% in China, 22% in Singapore, 14% in S. Korea. Here it’s just 8%. Because it’s so high in poor countries, recent increases in food prices are reducing consumer spending and threatening GDP growth.