Korea-U.S. FTA

About this blog:

This Weblog is maintained by Ben Muse, a resident of Alaska.  It is not affiliated with any organizations with positions on the Korea-U.S. FTA.

Obama slows down

The newsletter World Trade/Interactive reports that the Obama administration, which had shown some interest in the bilateral trade agreements with Panama, Columbia, and Korea earlier this year, has decided to slow down (World Trade/Interactive):

Remember last year's beef protests?

Ronda Hauben takes a trip down memory lane: Candlelight 2008 and Behind the Scenes in the Beef Deal. The role of the OIE in changing the category of US beef in South Korea.  Hauben has written a useful overview from the perspective of the protesters.

Ron Kirk talks sense to the American people

Trade isn't part of the problem, its part of the solution, says U.S. Trade Representative Ron Kirk: Remarks by Ambassador Ron Kirk United States Trade Representative. (remarks at Georgetown today).

Exports accounted for 13 percent of GDP last year and almost half of overall U.S. trade growth in the three years leading up to the recession.  As exports have fallen 16 percent, unemployment has risen, so:

"An aggressive effort to keep trade flowing and open more markets to American goods and services absolutely must be a big part of our economic recovery here at home...."

"To get our economy back on track, we need to increase exports. That means we need access to growing economies abroad...."

"...a strong case can be made for trade as a creator not just of jobs, but of the better-paying jobs that Americans want and need today."

Here's how the administration plans to proceed:

Sherrod Brown wants to slow down

Ohio Democratic Senator Sherrod Brown wants to slow down any potential effort by the Obama Administration to push for Congressional ratification of the Columbia, Panama or Korea trade agreements: Lawmaker Moves to Delay Free-Trade Pacts.  Speaking to the Washington International Trade Association, Brown

said he would introduce legislation to put pending trade deals on hold until a federal commission and the Government Accountability Office studied the benefits of existing trade policies. He said his intent isn't to delay the pending deals but rather to ensure that decisions on trade are "evidence-based."

Asked whether his effort would ultimately prevent the current Congress from taking up the free-trade pacts, Mr. Brown said, "I don't know the answer to that," before adding, "What's the rush?"

"Prove to me these trade agreements are working," he said.

Here's Brown's prepared statement.

All of these agreements have been evaluated by the U.S. International Trade Commission:

• U.S.-Korea Free Trade Agreement: Potential Economy-wide and Selected Sectoral Effects [Abstract]
• U.S.-Panama Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects [Abstract]
• U.S.-Colombia Trade Promotion Agreement: Potential Economy-wide and Selected Sectoral Effects [Abstract]

A variety of advisory committee reports on each agreement can be found here: Trade Agreements Home

FTA through key National Assembly committee; final Assembly action in June?

The National Assembly's Foreign Affairs and Trade Committee has signed off on the U.S.-Korea FTA, paving the way for final action by the Assembly: S. Korean parliamentary committee approves FTA with US.

The story mentions the possibility of Assembly action before the current session ends in April, but it sounds more likely in June, perhaps following a Korea-U.S. summit.

Progress in the U.S.

Suddenly things seem to be happening in the U.S. 

A week ago, Assistant USTR Danny Sepulveda said the USTR's Office hoped the trade agreement with Korea could be approved by Congress without renegotiation: USTR aims to preserve Seoul trade pact.

On the 20th, Ron Kirk, the U.S. Trade Representative, announced plans to review the Columbian and Panamanian agreements with a view to submitting them to Congress: USTR's Kirk: Will Start Review Of Colombia FTA Immediately:

U.S. Trade Representative Ron Kirk announced plans Monday to immediately start reviewing the Colombia and Panama free trade agreements to resolve the outstanding issues before the deals can be submitted for a vote in Congress.

Kirk, speaking to reporters on a call to discuss the Summit of the Americas conference over the weekend...

...the administration has said it would like to address some shortcomings in the Colombia and Panama deals before sending them up to Congress for passage.

Kirk cited "remarkable progress" in reducing violence in Colombia, but said a number of issues still need to be resolved that he plans to discuss with Colombia and congressional leaders.

For Panama, the remaining issues revolve around international labor standards and of the country "possibly being a tax haven," he said.

Doug Palmer covers the same ground for Reuters: Kirk to consult with Congress on Colombia trade.

Also on the 20th, Senators Max Baucus and Charles Grassley (Chair and ranking minority member of the crucial Senate Finance Committee) pointed to the security benefits of the Korea trade agreement to the U.S.: Baucus and Grassley letter:

North Korea’s April 5 launch of a three‐stage Taepo‐dong 2 missile and recent statements that
it will resume its nuclear program demonstrate yet again the threat that North Korea poses in
the northeast Asian region. These are only the latest in a long history of provocative actions.

In the face of this threat, it is vital that the United States maintain and expand its strong and
proven partnership with the Republic of Korea....

As the United States and Korea seek to defuse security threats for the sake of our nations’
safety, so too must we work to resolve bilateral economic issues for the sake of our common
prosperity....

The greatest challenge and opportunity in our bilateral economic relationship is the pending
U.S.‐Korea Free Trade Agreement (FTA)....

On the other hand:

Clearly, there is further work to be done if Congress is to support the agreement. In particular,
Korea has yet to ensure U.S. beef exporters full access to its market in accordance with
international standards. Korea’s long history of non‐tariff barriers to its autos sector also raises
serious concerns with some regarding the agreement. Postponing addressing such issues will
not make them easier to resolve.

What's next for U.S. beef?

Korea reopened its market to U.S. beef last year and sales have been improving.  Imports were initially restricted to beef from animals less than 30 months old; imports of from animals over 30 months were to be allowed when public attitudes improved enough to make it possible.  When will Washington seek access for the older animals: Age issue next likely challenge for U.S. beef imports.  After the current Korea-Canada beef controversy is over?

A step forward in the National Assembly?

The Foreign Affairs and Trade Committee in Korea's National Assembly plans to vote Wednesday, April 22, on sending the trade agreement to the Assembly itself: Assembly Committee to Vote on KORUS FTA Motion Wednesday.  Opposition legislators won't be voting for it, but it doesn't sound like they'll be trying to disrupt voting this time either:

The main opposition Democratic Party (DP) will not participate in the vote as its members oppose ratification before the U.S. government makes clear its posture. The minor opposition Liberty Forward Party also opposes ratification.

Negotiators of the GNP and the DP reached an agreement on voting on the motion during inter-party talks in January after U.S. President Barack Obama's administration took office.

KORUS FTA takes a step forward in the National Assembly

The National Assembly's Judiciary Committee approved the trade agreement, despite a walkout by the opposition: SKorea lawmakers endorse US FTA bill:

The bill was approved by the judiciary subcommittee after opposition legislators boycotted the meeting, the ruling Grand National Party (GNP) said.

The bill still requires approval by the subcommittees for foreign affairs, trade and unification, before it is submitted to a plenary session of the National Assembly for ratification.

Mid-January, 2009

In early January the standoff over the occupation of the National Assembly was resolved by an agreement that included a provision to postpone consideration of the trade agreement: FTA consideration deferred.

Korean Exports Plummet

Brad Setser summarizes recent Korean export statistics: This really doesn't look good:

Microsoft likes KORUS FTA

Yonhap News reports that Microsoft has released a policy paper endorsing the trade agreement with Korea: Microsoft urges Obama to help approve Korea FTA:

Beef progress

U.S. beef has been making progress in the Korean marketplace.  Troy Stangarone reports (Sales of U.S. beef take off as it goes mainstream):

FTA consideration deferred

With the end of the opposition occupation of the National Assembly chambers, the different parties have negotiated a schedule for voting on 85 bills: Lawmakers end Assembly standoff:

A timetable was agreed upon by floor leaders from the Grand National Party, the Democratic Party and an alliance of the Liberty Forward and Creative Korea parties yesterday evening, but votes on hotly contested bills were largely postponed to a February session or no deadline was set...

Of the list of 85 urgent bills that the GNP wanted to push through, negotiators agreed that 58 less-sensitive measures should be deliberated and voted on before the end of the current session...

The current Assembly session ends on January 8.  The trade agreement bill was left for some indefinite date after Obama's inauguration.  

The opposition occupation of the Assembly chambers was an effective parliamentary maneuver, forcing a revision of the majority's legislative timetable.

Troy Stangarone of the Korea Economic Institute summarizes the events of the last couple of weeks (Melee Breaks Out in National Assembly over KORUS FTA):

Sit-in ends; FTA deferred

Opposition legislators have traded their occupation of the National Assembly for an agreement by the majority Grand National Party to defer consideration of the trade agreement with the U.S.: South Korea Opposition Ends Occupation of Parliament.

Security tried repeatedly, and unsuccessfully, over the weekend to force the protesting legislators to leave the hall: SKorean parliament clashes leave dozens injured: officials:

About 150 unarmed security guards, acting on the speaker's order, have intermittently attempted to break up the sit-in since Saturday. Some protesters were frogmarched out but most others remained in place by linking arms.

The scuffles inside the National Assembly building have left 53 security guards injured while one of the DP lawmakers had an arm injury, officials said.

Not on Wednesday

This AP story says that the current session of the National Assembly runs until January 8, that the police were not sent in to the Assembly hall on Wednesday, and that negotiations between the GNP and protesting legislators began again Wednesday evening: Tensions high at sit-in:

On Tuesday, assembly speaker Kim Hyong-o, a former member of the ruling party, threatened to send guards into the chambers to haul the legislators out.

On Wednesday evening, rival party leaders agreed to resume negotiations on a compromise in the new year, averting a New Year's Eve blowup.

But unconvinced legislators continued to camp out at the National Assembly. As the rest of Seoul prepared to celebrate the New Year at parties across the capital, the protesting lawmakers dug in with their laptops, bottled water and takeout food.

Will the Korean National Assembly Ratify KORUS FTA Wednesday?

On December 18, majority party legislators (members of the Grand National Party - GNP) moved the trade agreement bill through the Foreign Affairs committee: Adventures in legislation - the National Assembly takes up the FTA.  Opposition legislators were locked out of the committee meeting and attacked the doors of the meeting room.

Adventures in legislation - the National Assembly takes up the FTA

The National Assembly has taken up the trade agreement with the U.S.

Fighting the FTA in the National Assembly

Lawmakers from several National Assembly opposition parties have formed an emergency committee to oppose the trade agreement: Opposition lawmakers fight FTA ratification:

Pressure the U.S. by signing with the E.U.

Suh Jin-kyo, Director of trade and investment policy at the Korea Institute for International Economic Policy, says Korea should complete its trade agreement negotiations with the E.U. to put pressure on the U.S. (Proposal Made to Implement FTA With EU Ahead of US):

Compromise in Korea?

Korean President Lee Myung-bak is still hoping to see the trade agreement ratified this year: Lee Firm on Ratification of U.S. FTA This Year.  But he's looking for ways to address some opposition party concerns:

Sounds like the GNP is backing off

Yonhap: S Korean Ruling Party Backtracks Over Early US Fta Ratification

Early passage of a free trade pact with the United States looked increasingly unlikely here Wednesday as the ruling party slackened its push in the face of a chorus of opposition from rival parties.

Roh comes out in favor of renegotiation

The trade agreement was negotiated by Former South Korean President Roh Moo-hyun.  Roh has just published an article calling for renegotiation: Roh comes out in support of FTA renegotiation; Roh shifts stance on Korea-U.S. FTA; Roh should keep out of the FTA debate.

Is National Assembly FTA action imminent? Or not?

On Monday: National Assembly to Mull Korea-U.S. FTA:

The ruling Grand National Party on Monday decided to submit a motion for ratification of the Korea-U.S. free trade agreement to the National Assembly Foreign Affairs, Trade and Unification Committee as soon as the committee finishes a public hearing on the FTA deal on Wednesday. The two sides of the house are therefore expected to clash, as the main opposition Democratic Party has already said it will block the motion.

The Grand National Party (GNP) has 172 of the 299 seats in the unicameral national legislature).

But on Tuesday: GNP Rules out railroading FTA ratification:

The governing Grand National Party (GNP) stepped back Tuesday from its plan to pass the Korea-U.S. free trade agreement (KORUS FTA) unilaterally, vowing to make further efforts in drawing bipartisan consensus for the ratification.

The Korea-U.S. FTA Task Force

The government and the ruling Grand National Party (GNP) have followed up on their decision Friday to push forward with the FTA, and created a "Korea-U.S. FTA Task Force." 

The purpose appears to be to coordinate efforts for ratification in the National Assembly in November, and to lobby for ratification this year in the U.S.: GNP Pushes for Korea-U.S. FTA Ratification Within This Year:

Why don't U.S. cars sell well in Korea?

 

Ford Taurus in a Korean Ad.  Source: TheCarBlogger

Because their seen as clunky, with low gas mileage, says the head of Chrysler Korea:  S. Koreans Shun U.S. Cars on Gas-Guzzling Image:

American cars aren't selling well in South Korea due to consumer perception of U.S. vehicles as clunky and having poor gas mileage, the head of Chrysler LLC's local unit said Tuesday.

U.S. automakers such as Chrysler and General Motors Corp. are lagging far behind Japanese and German rivals in sales in the nation's booming market for imported vehicles.

Sales of imported cars in South Korea are expected to grow more than 20 per cent from a year earlier to 60,000 units this year, but no U.S. models have taken the top-10 sales ranking here.

South Korean consumers have "negative perceptions that U.S. cars are sizable, but have poor fuel-economy," said Ahn Young-seok, the country manager of Chrysler Korea, at a press conference to launch sales of a mid-size sedan Sebring.

To boost sales in South Korea, "The most urgent task is to change those perceptions, but it's difficult to resolve the issue in the short term," Ahn said.

Koreans to move on trade agreement with U.S.

On Friday the Korean government and the governing party are going to move forward to ratify the trade agreement in order to make renegotiation harder: FTA ratification back on table.

The administration and ruling party decided October 31 that they are going to move towards an early ratification of the free trade agreement with the United States, meaning many will be watching to see whether a ratification bill passes the current National Assembly session.

The decision came at a high-level government-ruling party policy coordination meeting held at the prime minister’s office that was attended, among others, by Grand National Party Chairman Park Hee-tae, Prime Minister Han Seung-soo, and President Lee Myung-bak’s chief-of-staff, Chung Chung-kil.

“The government and ruling party have decided to have the FTA with the U.S. passed as quickly as possible under agreement with the ruling and opposition parties,” said GNP spokesman Yoon Sang-hyun. “It was decided that a government-ruling party task force would be formed to respond to the matter swiftly and in a systematic fashion in a working-level situation.”

I don't know what the expression "agreement with the ruling and opposition parties" means.  Does it refer to a procedural agreement to bring the bill up for a vote, that both parties are agreed that the bill needs to be passed?

This short story focuses on the reasons for moving forward (Gov't, GNP seek to Ratify FTA This Year):

If Democratic Senator Barack Obama wins the race for the White House on Tuesday, Washington could ask to renegotiate the agreement, a scenario which concerns Seoul.

The government believes a swift ratification of the current deal could help to block any changes the next U.S. administration might try to propose.

Earlier in the week a representative of the Korean Ministry of Foreign Affairs and Trade had urged the National Assembly to ratify the agreement to put pressure on the U.S. (Foreign Ministry Calls for Speedy Ratification of Korea-U.S. FTA ):

...Deputy Trade Minister Ahn Ho-young stressed the need for swift ratification of the FTA in order to encourage the U.S. to follow suit.

Back to the first of these stories (FTA ratification back on table):   The story goes on to suggest that there is general agreement on the need for the trade agreement, but disagreement on preconditions for passage:

GNP members who are less than enthusiastic about passing a ratification bill within the next two months are not considered party heavyweights, however, and their voices are not expected to influence the agreement arrived at by the administration and the GNP.

The Democratic Party agrees in principle on the need to ratify the Korea-U.S. FTA, but wants the agreement approached in stages, with preparations made for an open market with the United States before the trade pact is ratified. It wants to see the government first do something for those who will suffer as a result of the deal -- people like farmers. Democrats say it would not be too late to ratify the pact after seeing which way the U.S. presidential election turns, and look over what the advantages and disadvantages of the FTA would be at that point.

The ruling and opposition parties do generally agree on the need to pass the FTA. But major differences about what to do about those who would be affected, and with the National Assembly’s plate already full as it is with the 2009 national budget and the GNP proposing many bills that would “turn the clock back to the past,” it does not look like navigating the discussion is going to go smoothly.

I'm surprised by the assertion that both the ruling and opposition parties tend to support the agreement.  That sort of unanimity has been missing in the past and this editorial from The Korean Times suggests there are still different points of view Impatient Free Traders.

Revised November 2, 2008.

Obama would submit the Korea-U.S. FTA to Congress next year?

Yonhap News Agency reports that an aide to the Obama campaign said Saturday that a President Obama would submit the trade agreement with South Korea to Congress early next year, assuming certain preconditions are met: Obama to Submit Korean Free Trade Pact for Ratification in 2009.

U.S. Democratic presidential nominee Barack Obama will submit a free trade agreement (FTA) between South Korea and the U.S. for ratification early next year if he is elected on Nov. 4, his foreign policy adviser said Saturday.

The adviser, Frank Jannuzi, set several preconditions, however, including the "strengthening of the access of American automobile exports to Korea, taking steps to make sure workers who might lose their jobs will get job training and unemployment and health insurance, and solving the beef issue"....

"I will tell you honestly that Senator Obama opposes the Korea-U.S. free trade agreement as it is drafted because he felt it failed to address some key things that need to be addressed," Jannuzi said in a speech to a gathering of Korean-Americans in Annandale, Virginia.

The aide, however, said the Illinois senator's opposition is "not forever," adding Obama supports free trade and that "as president, he will do the things necessary to see its ratification is possible."

Jannuzi singled out the beef issue, saying that it "has mostly been solved but we've got still a little bit more to do. But, if these issues are addressed, I am confident Senator Obama will submit the Korea-U.S. agreement successfully to Congress for its approval and I hope it will happen early next year."

This is a big surprise to me if it's true.  Jannuzi is described in the Council of Foreign Relations biographical sketch at the link as the chief East Asian advisor to Democrats on the Foreign Relations committee, reporting in that capacity to Sen Biden.

GNP would like to ratify the trade agreement this year

 

National Assembly.  Source: BBC.

South Korea's governing Grand National Party (GNP) would like to ratify the trade agreement with the United States this year, and is only waiting until the National Assembly's Foreign Affairs, Trade, and Unification Committee completes an audit of the Foreign and Trade Ministry, says Committee Chair Park Jin: GNP Hope Korea-U.S. FTA Will Be Ratified Soon.  The story implies that ratification could take place before the U.S. Presidential election.

...The FTA bill was laid before the committee in February, during the final days of the 17th National Assembly, but it lapsed automatically when it was not ratified before the deadline. The government submitted the bill again to the 18th National Assembly.

“Due to the recent economic slowdown, the U.S. is beginning to favor protectionist policies and the FTA is being pushed from the priority list. Especially, when the Democratic candidate Senator Barack Obama gets elected as the next U.S. president, the U.S. is likely to push for renegotiation in automobile trade and introduction of the Trade Adjustment Assistance (TAA) Program,” said Park....

The world financial crisis reaches Korea

Emmanuel Yujuico at the International Political Economy Zone: Did South Korea Not Learn Its Lesson?.

Blaine Harden of the Washington Post: South Korea to Give Banks $100 Billion In Loan Guarantees. Move Aims to Boost Market, Currency.  Kyung Bok Cho and Saeromi Shin report that South Korea's Won Gains on Financial Rescue; Bank Stocks Rise .

U.S. Approves Visa Waiver for Korea!

On Friday the Bush Administration announced that visa waivers would be extended to seven more countries, including South Korea: Bush: South Korea, six others, get visa waivers:

US President George W. Bush announced Friday that citizens of South Korea and six other US allies would enjoy visa-free travel to the United States beginning about one month from now....

The Dong-A Ilbo editorial writer thinks its about time ([Opinion] U.S. Visa Waiver Program ):

The inequality in travel visas between Korea and the United States will be removed soon. U.S. President George W. Bush has announced Korea’s inclusion in the U.S. visa waiver program, allowing Koreans to travel to the United States for up to 90 days visa-free from January at the latest. Since 1981, Korea has allowed Americans to visit Korea with no visa for 15 days and extended the period to 30 days in 1999. Thus the inclusion of Korea in the U.S. visa waiver program is a welcome measure that properly reflects the longstanding Korea-U.S. alliance.

The U.S. visa policy toward Korea has been somewhat offensive. Washington has long included Japan and Singapore among 27 countries in the visa waiver program, while excluding Korea for its high rate of visa rejection. No matter what the criteria are, Koreans suffered discriminatory visa treatment. Whenever long lines for visa applications formed at the U.S. Embassy in Seoul, the favorable impression of the United States in the eyes of Koreans eroded. It is also a matter of national status and pride in that visa exemption status means Koreans are considered eligible tourists with no danger of illegal stay....