Korea-U.S. FTA

No Beef, No Baucus (For Now)

This week's negotiations dealt with auto issues and didn't lead to an agreement with the Koreans on beef. 

Senator Max Baucus of Montana, the Democratic chair of the Senate Finance Committee, is "deeply disappointed": Baucus Deeply Disappointed With Announcement on Korea Trade Deal, Commits to Keep Fighting for American Ranchers.

What happens now?

Jonathan Dingel at Trade Diversion wonders "Will the revised Korea-US PTA be fast tracked?"   Trade promotion (fast track) authority covered agreements entered into before July 1, 2007. 

Also, does the new agreement mean it's "Back to square one in the National Assembly?"

 

Details of the 2010 Supplemental Agreement

The White House description of the auto measures in today's agreement is here: Increasing U.S. Auto Exports and Growing U.S. Auto Jobs Through the U.S.-Korea Trade Agreement. 

This fact sheet only lists auto measures - additional measures are described by Mark Drajem for Bloomberg: South Korea, U.S. Rework Trade Accord to Appease Ford on Tariff Timetable. Additional measures described in this story by Cathy Rose A. Garcia for the Korea Times: Korea, US agree on delay on car tariffs. This story, by Choi He-suk in the Korea Herald, mentions a U.S. concession on medical issues: Korea defends car concession.  This story, by Jung Seung-hyun for JoongAng Daily, provides a tad more detail on the medicines: A ‘win-win’ compromise breaks FTA deadlock

Here's a list of supporters: Statements of Support for the U.S-Korea Trade Agreement.  After today, these supporters include:

The KORUS FTA Appears in the Wikileaks Cables

The FTA turns up, pretty innocuously, in some of the U.S. State Department cables released through Wikileaks.  Cho Jin-seo read them and summarized them for The Korea Times: Wikileaks shows Obama, Lee in same boat for FTA, G20

What is an FTA?

Martha C. White in Slate: Trade Policy 101.  What's in those free-trade agreements—and do they really boost exports?   This is a useful survey of the issues typically addressed in an FTA - an FTA is much more than just tariff reductions - and the debates that they evoke.

We have a deal!

The negotiators have come to agreement.  Howard Schneider reports for the Washington Post: U.S. and Korea complete trade deal:

Details of the pact - the Obama administration's first major foray into the arena of free trade politics - are expected to be released on Friday evening. But sources familiar with the talks said it provides key concessions for the U.S. automotive industry, including a slower reduction of tariffs on South Korean imports and provisions that should make it easier for American firms to crack the South Korean market.

The Third Day

Elizabeth Williamson reports that negotiators are "are down to one main sticking point,"  the time frame over which the 2.5% U.S. tariff on autos will be phased out.  In the original agreement, the tariff on cars with small gas engines would be eliminated immediately, and the tariff on cars with larger gas engines and diesel engines would be eliminated over three years. 

People involved in the talks were optimistic about the chances for a deal, calling the narrow focus on the tariffs issue a sign of progress.

...

While agreeing to a pact that would phase the tariff out over a half decade or so would be seen as a victory for the U.S. side, its economic benefit could be dwarfed by normal currency fluctuations. In November alone, the dollar rose 0.4% against the South Korean won, virtually equivalent to the level a one-year tariff reduction would provide.

Here: U.S.-Korea Pact Hinges on Auto (Wall Street Journal).

Doug Palmer, the Reuters trade reporter, tweets that talks may go to a fourth day.

Palmer's story here: the negotiations continued into Thursday night.

Ju-min Park also reports for Reuters: U.S., Korea make headway on trade talks: report.  This report was filed at the close of the third day's meeting, which went late into the evening.  The focus is on comments by the Korean trade minister: he sees progress, there will be a fourth day, there is the prospect of a further extension (a fifth day? or a further meeting?  not clear), and the meeting appears to be focused on cars:

"Beef was not discussed," the Yonhap quoted Kim as saying.

Palmer quoted Kim going into the afternoon session saying the two sides were "far away" from an agreement.  In Park's late night story Kim is more upbeat.

Columbia Talks Extended By a Day

From the Wall Street Journal's "Korearealtime" blog: Another Day for U.S.-Korea Trade Talks.

From a Yonhap report in the JoonAng Daily: FTA talks with U.S. extended, with focus on auto import. This report says the focus of the negotiations remains on autos and that beef hasn't been discussed.  The third day is described as a "last-minute" effort, after differences over autos couldn't be resolved on Wednesday:

Columbia (Maryland) Talks, Day One

Limited reporting this morning about the first day's negotiations in Columbia, Maryland.  Here's a short story from Jung Seung-hyun and the JoongAng Daily: Outcome still uncertain on FTA talks with U.S.. 

The story suggests that the U.S. didn't introduce new issues ("nothing has changed and the same matters are being discussed"), that the U.S. focus the first day was on autos ("the issue of revising limits on U.S. beef imports had not been raised in the talks"), and that the U.S. won't get something for nothing ("the current negotiations involved a “package deal,” suggesting that Korea would seek unspecified concessions from the U.S. in return for revising the auto standards.").  

The Koreans are not averse to extending the negotiations a day or so if necessary.  Follow up negotiations would occur in Korea.