Korea-U.S. FTA

The UAW supports the KORUS FTA

The United Auto Workers is on-board for KORUS FTA (UAW statement on the proposed U.S.-Korea Free Trade Agreement):

Camp's thoughts on the FTA

The Ways and Means Committee is the key House committee for the FTA.  The next Ways and Means Chair is likely to be Republican David Camp of Michigan, and he wants more on autos.

What are these Korean non-tariff barriers to U.S. cars and trucks?

Auto industry representative Stephen Collins explained to a Ways and Means subcommittee in 2007:

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:

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

 

Ford Taurus in a Korean Ad.  Source: TheCarBlogger

Because they're 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.

What happens when U.S. and Korean auto tariffs are eliminated?

Dr.Sang-yirl Nam estimates that the auto tariff provisions of the Korea-U.S. trade agreement - examined independently of the rest of the provisions of the agreement - would provide Korea a $178 million welfare gain, but cost the U.S. about $20 million.

UAW Leader Says South Korea Steals U.S. Jobs

The United Auto Workers (UAW) President Ron Gettelfinger spoke to about 1,000 union activists on Feb 3: South Korea called threat (Justin Hyde, Detroit Free Press, Feb 4). 

The speech touched on other issues including the upcoming election,the stimulus package, and a recent agreement with the auto companies, but he got in a dig at Korea:

Foreign Auto Makers in U.S. Like KORUS FTA

The Association of International Automobile Manufacturers endorses the Korea-U.S. FTA: AIAM Affirms Its Support For the Korea Free Trade Agreement (press release, October 1).

The association membership includes Korean firms, like KIA, but firms from other countries as well, including many Japanese firms.

Here's the press release:

Ford Pushes, South Korea Pushes Back

Doug Palmer (Ford and South Korea dig in heels over trade deal, Reuters, Sept 26) reports that Stephen Biegun, Ford's Vice President for International Governmental Affairs, has

...warned of a fight in the U.S. Congress that could damage the entire free trade agenda unless the pact is renegotiated to address an "ever-changing pattern" of South Korean barriers to keep out auto imports.

Palmer says that "Ford has emerged as the biggest industry opponent of the free trade agreement."

Seok-young Choi, economic affairs minister at the South Korean embassy responded that, South Korea has no intention to renegotiate.

Choi called Biegun's concern "totally unreasonable" and said the U.S. auto industry was blaming South Korea for its own chronic problems. "The U.S. auto industry has little interest in penetrating the Korean market," as shown by its disregard for Korean consumer preferences, he said.

"The U.S. government should do something for the U.S. auto industry, but why should Korea?" Choi said.

Schott on the Auto Provisions

Detroit's opposition to the auto provisions of the Korea-U.S. FTA has become one of the key issues for opponents of the agreement.  Both Ford and Chrysler, and the UAW, have come out against the agreement.  Many Democrats have echoed their concerns.

In 2006, while Korea exported about 700,000 cars to the U.S., the U.S. only was able to export about 4,500 to Korea.  Even setting aside the differences in population and per capita income, this seems like a large difference.  There are certainly tariff barriers to U.S. exports to Korea, but the industry has also pointed to other, persistent, non-tariff barriers, as a big concern: Korea's NTBs on foreign autos (Ben Muse, July 8, 2007).

Jeffrey Schott, a senior fellow at the Peterson Institute, reviewed key provisions of the Korea-U.S. FTA in a recent Institute Policy Brief (The Korea-US Free Trade Agreement: A Summary Assessment, August 2007), and doesn't think the auto provisions should be a stumbling block: