Since Spring 2006 I've been trying to follow the Korea-U.S. FTA negotiations.
For various reasons, I've found posting to this blog on this topic increasingly inconvenient. I'm setting up a separate blog to accumulate posts related to these negotiations: Korea-U.S. FTA.
This post has not been updated since June 18. All Korea-U.S. FTA material is now being posted to a new topic-specific blog: Korea-U.S. FTA.
I'm going to pull together a set of annotated links to web based materials on the U.S. - So. Korea FTA negotiations over the next few months.
This post is subject to ongoing correction, revision, reorganization, and elaboration. Last updated June 15.
This post pulls together a large number of different types of web material. Several surveys or reports have been particularly useful. These include:
This post has not been updated since June 18. All Korea-U.S. FTA material is now being posted to a new topic-specific blog: Korea-U.S. FTA.
I'm going to pull together a set of annotated links to web based materials describing the contents of the U.S. - So. Korea FTA, and evaluating its impacts on the U.S. and Korea.
This post is mean to complement a second post describing the history of the negotiations and ratification processes: KORUSFTA .
Like the related post, this post is going to be subject to ongoing correction, revision, reorganization, and elaboration.
Last updated June 14.
So. Korea released the text of the Korea-U.S. FTA agreement Friday morning in Seoul: S. Korea publicizes full text of FTA with U.S., criticism expected (Yonhap News, April 25):
Continue reading "So. Korea releases text of Korea-U.S. FTA" »
So, will a U.S.-Korea trade agreement affect Korean productivity growth more through increased exports to the U.S., or through Korea's own increased openness to imports?
Sangho Kim of Honam University, Hyunjoon Lim of the University of Rochester, and Donghyun Park of Nanyang Technological University look at The Effect of Imports and Exports on Total Factor Productivity in Korea (Research Institute of Economy, Trade, and Industry, April 2007), and find that:
What does it mean for policy:
Continue reading "Have imports or exports driven Korean productivity growth (since 1980)?" »
In a post last week, I collected stories on several countries that are concerned about being placed at a competitive disadvantage in either the Korean, or the U.S. market, or in both, by the U.S.-Korea FTA: Trade Diversion (Apr 3).
Fear of trade diversion may motivate the U.S. as well. Fred Bergsten points to trends toward Asian regional economic integration (in the form of a Northeast Asia Free Trade Area agreement between China, Korea,and Japan, a "10+3" agreement between ASEAN, China, Korea, and Japan, or a '10+6" agreement adding in Australia, New Zealand, and India), and to various American concerns about this, including diversion of its own trade.
Viewed in this light, the U.S.-Korean agreement has defensive and reactive elements on the part of the U.S.: China and Economic Integration in East Asia: Implications for the United States (Peterson Institute, March 2007):
Now the FTA agreement, whose exact terms we don't know at this point, goes to the U.S. Congress, and the Korean National Assembly.
In this post I've tried to pull together some Korean news stories on the prospects for ratification in the National Assembly. I'd caution that I'm feeling my way forward here, and that I don't have enough independent knowledge of Korean politics and public life to evaluate and weigh the different sources, and fit them into a whole picture, as well as I'd like -
Continue reading "The US-Korean FTA in the Korean National Assembly" »
The title is a nod to Jonathan Dingel's excellent trade blog.
A U.S. - Korea trade agreement is going to impact third parties. These impacts create incentives for these countries themselves to seek FTAs with the U.S. and Korea. A variety of news stories have been addressing this.
This is not an attractive alternative to a multilateral approach through the World Trade Organization, as this Financial Times editorial points out: One trade deal done, thousands to go (Apr 3). Martin Wolf also weighs in: A Korean-American strand enters trade’s spaghetti bowl (Financial Times, Apr 3):
This month marks the 60th anniversary of the General Agreement on Tariffs and Trade, of which Cordell Hull was a founding father. It also sees the announcement of a “free trade agreement” between his country and South Korea. The core of the Gatt was non-discrimination. The core of the new agreement is its opposite. Thus has the US taken the betrayal of its erstwhile principles even closer to its logical conclusion....
In this case, the US and South Korea agree to discriminate in favour of exporters or investors based in each other’s territory. The obvious potential economic cost of such an agreement is what Jacob Viner, the great inter-war trade economist, called “trade diversion”. In other words, the partners might shift from more competitive to less competitive suppliers. In this case, however, trade diversion may be modest, since these two countries are among the world’s most competitive suppliers of a wide range of goods and services.
A more significant economic cost, however, is systemic. The number of preferential trade agreements has exploded upwards in recent years (see chart). An agreement between the US and South Korea is itself a quantum leap in this progression... Other countries will be desperate to avoid the adverse effects upon them. This makes probable yet another jump in the prevalence of such agreements.
Several of the stories in the survey of press clippings below discuss the way the U.S.-Korea agreement encourages further bilateral agreements. He goes on:
That will have at least two further economic consequences. First, an increasing proportion of the world’s trade is sure to be governed by the diverse rules of origins and special procedures of a host of discriminatory bilateral and plurilateral agreements. That guarantees an explosion in administrative complexity. Second, every further bilateral agreement will alter the degree of preference enjoyed by existing suppliers. That guarantees an explosion of business uncertainty. These are indeed inevitable results of what Prof Bhagwati has called the “spaghetti bowl” of preferences....
Evan Ramstad describes key features of the trade agreement for the Wall Street Journal (U.S.-Korea Trade Deal Still Faces Hurdles (April 3). He says that the final text won't be available for "a week or two." Meanwhile, we know a few things:
Continue reading "What did the U.S. and Korean negotiators agree to?" »
U.S. and South Korean negotiators reached agreement on April 1 (in the U.S.), as late as they possibly could, and still notify the U.S. Congress in time to take advantage of the existing U.S. trade promotion authority: S. Korea, U.S. reach free trade agreement (Yonhap News, April 2 in Korea); South Korea, U.S. Reach Free Trade Deal (AP, April 1 in the U.S.).
Evan Ramstad describes how it ended for the Wall Street Journal (U.S.-Korea Trade Deal Still Faces Hurdles (April 3):
The two countries reached the deal just before midnight, Eastern Time in the U.S., in time to reach Congress ahead of a deadline tied to the expiration of Mr. Bush's trade-negotiating powers.
With fewer than 80 minutes remaining to the U.S. deadline, South Korea Trade Minister Kim Hyun Chong left the Grand Hyatt Hotel in Seoul, where the negotiations were taking place, to meet Mr. Roh and several other cabinet ministers to discuss final terms. He called Mr. Bhatia on his way back to the hotel -- 22 minutes before the deadline -- to say the countries had a deal.
A complete draft of the deal will take a week or two, after which Messrs. Bush and Roh will have to win approval for the deal from lawmakers.
Here's a somewhat earlier Ramstad story (U.S., South Korea Reach Trade Pact, Wall Street Journal, April 2 in U.S.):
Negotiations on the FTA between the U.S. and So. Korea have to be wrapped up this week if the current U.S. trade promotion authority is to be used. Kelly Olsen reports on the intense ongoing negotiations in Seoul: U.S.-S.Korea Trade Talks Down to Wire (AP via Houston Chronicle, March 29). Kim Deok-hyun reports on the closing hours of the negotiations: S. Korea-U.S. FTA talks head for conclusion amid optimistic notes (Yonhap News, March 30)
There was a hitch on Friday: U.S., S.Korea trade talks stumble at last minute (Jack Kim, Reuters, March 30) - no word in the story on what the problem was. The U.S. evidently decided that it could delay completion of the negotiations as late as noon on Sunday, April 1, and still meet the conditions necessary for consideration of an agreement under current trade promotion authority. Heejin Koo reports: U.S., South Korea Extend Their Free-Trade Talks (Bloomberg, March 30).
Evan Ramstad reports on what's at stake for Korea in the negotiations: South Korea Ready to Open Up (Wall Street Journal, March 28 - illustration accompanies the Journal article):
...South Korea's economy now faces a problem. While it grew by 8% to 9% a year for much of the 1990s, its growth has recently slowed to 5%. A key reason: Chinese competitors are taking away South Korea's lead in low-cost manufacturing and threatening South Korea's higher-value industries.
To boost the economy, President Roh Moo Hyun says South Korea needs to do away with the old growth model and open up. He initiated the trade talks two years ago, hoping to attract more foreign investment and stimulate service industries, which account for 48% of the South Korean economy, compared with about 70% in the U.S.
Mr. Roh has also started free-trade negotiations with Canada, Australia and New Zealand, and is exploring talks with the European Union and the six Arab states that form the Gulf Cooperation Council.
The free-trade talks come as South Korea strives to make other efforts to speed up its economic growth. Regulators are pushing to make the country's businesses more transparent in hopes of boosting global competitiveness, addressing criticism that South Korea had weak accounting and disclosure standards. The country has opened its banking sector to foreign owners and competitors, resulting in the fast growth of global players such as HSBC Holdings PLC and a variety of new financial services.
In another article, Ramstad reports that agriculture is a key to the negotiations: U.S.-South Korean Trade Talks May Turn on Beef, Rice Imports (Wall Street Journal, March 30). Ramstad's got an interesting story to tell:
The U.S. and South Korea are working towards a Friday deadline to conclude negotiations on thier free trade agreement (FTA). After that, they will not be able to take advantage of the existing U.S. trade promotion authority.
The Hankyoreh carries this Yonhap News report: S. Korea, U.S. struggle to bridge differences in final FTA talks (March 26):
Last week, from October 23 to 27, the U.S. and So. Korea held the 4th negotiating session on their proposed Free Trade Agreement.
This post is a collection of links to, and "clippings" from, news coverage of the session. Korean coverage of the negotiations was much more extensive and detailed than U.S. coverage, so the post may reflect Korean interests and perspectives disproportionately. I'll update this post if I get new information.
The negotiations took place in the Korean city of Seogwipo on Cheju or Jeju Island. This story from The Hankyoreh, "Jeju Island opposed to hosting FTA talks," explains that the Jeju government wanted to see the negotiations take place somewhere else, because they expect the FTA to hurt the local economy, particularly tangerine agriculture.
As in earlier negotiating sessions, the round had a number of separate issue-oriented negotiating groups: "The round will deal with 16 divisions, including commercial goods, agricultural products, and textiles, and working-level negotiations in automobile and pharmaceutical areas. Government procurement division negotiations were held separately in Geneva on October 16. " (4th Round of Free Trade Talks Begin , The Dong-A Ilbo, Oct. 23) This Korean Embassy website lists all the different divisions of the negotiations, as they stood in the spring, and names the Korean and U.S. officials in charge of each: Free Trade Agreement .
My impression is that the negotiators were more upbeat after this round of talks than they had sometimes been, following earlier rounds. The People's Daily Online (S.Korea says progress made in FTA talks with U.S., Oct. 28) quotes chief U.S. negotiator Wendy Cutler,
"In general, I think we moved forward the talks," said U.S. chief negotiator Wendy Cutler, who also works as assistant U.S. trade representative. "This is a big step forward from the previous rounds."
Cutler said considerable progress was made in customs, re- manufactured goods, administration of agricultural tariff rate quotas and anti-corruption provision during the talks. She acknowledged that wide gaps still remain in agriculture, industry and other sensitive sectors.
The chief Korean negotiator, Kim Jong-hoon, was also upbeat (Korea, U.S. Wrap up Fourth Round of FTA Negotiations with Practical Progress, Oct 27):
Kim Jong-hoon, chief negotiator for Korea to the bilateral trade negotiations, stressed at a new conference after the talks ended, “"During this round, Seoul and Washington have made practical headway," saying that the U.S. offered Korea an improved concession to cut tariffs on some 1,000 industrial goods, which include mobile phones and other high-tech products of great interest to Korea..
Cutler said that the U.S. delegation had about 100 members, drawn from almost 20 agencies. Korea fielded a delegation of about 250 from 26 ministries, and 13 public institutions .... and 10,000 riot police (4th Round of Free Trade Talks Begin , The Dong-A Ilbo, Oct. 23); S. Korea-U.S. free trade talks resume, overshadowed by nuclear issue , The Hankyoreh, Oct. 22)
Continue reading "October in Jeju: KORUS FTA - the 4th Session" »
Wonhyuk Lim wonders why the Roh Moo-hyon government chose to pursue an FTA with the United States: KORUS FTA: A Pragmatic and Strategic View (Nautilus Policy Forum Online, June 13, 2006).
The decision was a surprising policy change:
The second round in the U.S. Korea FTA negotiations took place in the Shilla Hotel in Seoul the week of July 10.
The American delegation was led by Wendy Cutler from the USTR's office, the Korean delegation was led by Kim Jong-hoon of the Korean Ministry of Foreign Affairs and Trade (MOFAT). (This image is from a story on the Korean Embassy web site.) Everyone looks pretty happy here, but disagreements over the treatment of pharmaceuticals in the Korean national health care system caused problems.
This Korean Ministry of Foreign Affairs and Trade press release describes the Korean delegation, and Korean preparations for the sessions: Launching of the Second Round of Korea-U.S. (KORUS) FTA Negotiations (July 7).
The second round of FTA negotiations between the U.S. and South Korea take place this week ("KORUS FTA" is the acronyn at the USTR web site).
Jon Herskovitz reports on the first day's negotiations: South Korea-U.S. hold free trade talks amid protests (Reuters via Washington Post, July 10)
The chief Korean negotiator is Ambassador Kim Jong-hoon and the Chief U.S. Negotiator is AUSTR for Japan and Korea, Wendy Cutler. The Korean Embassy contains lists of the key issues, and the key players on the two negotiating teams for each of the issues: Free Trade Agreement .
The U.S. and So. Korea are working on a Free Trade Agreement (FTA). The first round of negotiations was held in Washington in early June; the next begins July 10 in Seoul. The potential economic and political benefits are attractive for both countries (Are there large potential benefits from a U.S.-S. Korea FTA? , June 18).
Jeffrey J. Schott, Scott C. Bradford, and Thomas Moll provide a useful overview of the issues in their recent report: Negotiating the Korea–United States Free Trade Agreement (Institute of International Economics, June 2006).
They point out that one of the key issues is a So.Korea joint venture with No. Korea in an industrial park at Kaesong in No. Korea. This is an important project for the So. Koreans:
What's potentially at stake in the U.S. - Korea FTA negotiations? Economically, a lot for Korea, somewhat less for the U.S.
Continue reading "Are there large potential benefits from a U.S.-S. Korea FTA?" »
The U.S. and South Korea held the first negotiating session on the proposed free trade agreement last week. The staff at the International Centre for Trade and Sustainable Development (ICTSD) Bridges Weekly Trade News Digest report:
Continue reading "U.S.-So. Korea FTA negotiations underway" »
