Korea-U.S. FTA

Korea, Colombia, and Panama

Will Republicans use KORUS FTA to pressure the administration on try to move on the Colombian and Panamanian FTAs: GOP tactic threatens South Korea trade pact (Politico, December 14):

KORUS FTA held hostage

Sewell Chan: U.S. Plans for Trade Are Stalled  (NYT, February 28):

Although the White House renegotiated a pivotal free-trade agreement with South Korea in December, scoring rare bipartisan praise, House Republican leaders have refused to allow the deal to move forward. They want the administration to make progress first on similar accords with Colombia and Panama that face stiff opposition from labor unions and liberal Democrats.

...

“We’ve made it clear that the time has run out on Colombia and Panama,” said Representative Kevin Brady, Republican of Texas, who leads the trade subcommittee of the House Ways and Means Committee. “It is time to move on them, along with Korea, in the first six months of this year.”

Mr. Brady said the three deals had to be submitted to Congress as a package. “It would do great damage to our bipartisan efforts on trade if the administration sends Korea up by itself right now,” he said.

Still working out the KORUS revision language

From the USTR web site: "Assistant U.S. Trade Representative Wendy Cutler and Korean Deputy Trade Minister Choi Seok-young will meet in Seattle, Washington, December 17-19 to work on legal text for the recently concluded accompanying agreement to the U.S.-Korea trade agreement."

A brief summary of the December KORUS revisions

Jeffrey Schott of the Peterson Institute has a brief overview of the revisions to the agreement in this 3-page Peterson Institute Policy Brief: KORUS FTA 2.0: Assessing the Changes.  Short, but nice for context - including some comments on interactions with KOREU FTA and a potential Doha Round agreement.

U.S. Unions Divided on Deal

The UAW and United Food and Commercial Workers are for the deal, but

The machinists’ union has denounced the Korea deal, while two other powerful unions, the steelworkers and the communications workers, will announce their opposition on Thursday, union officials say.

And the AFL-CIO will probably come out against the agreement Thursday as well:

The nation’s main labor federation, the A.F.L.-C.I.O., is usually quick to denounce trade agreements, but so far it has been silent about the Korean pact, apparently because of the disagreement among its member unions.

Several union officials said, however, that the A.F.L-C.I.O. would issue a statement early Thursday criticizing the Korean deal, in particular for not doing more to protect the rights of workers to unionize in both South Korea and the United States.

Steven Greenhouse: U.S. Union Backing Helps Korea Trade Pact Chances

A Note on Parliamentary Procedure in the National Assembly

Evan Ramstad reports on "Fistfight Theater in Korea Parliament":

South Korea’s parliament has no filibuster or any other method for opposition parties to slow down legislation they don’t like. Most of the time, the opposition party lawmakers simply vote their votes and let the ruling party take responsibility for good or bad legislation.

But when lawmakers want to show that they really don’t like what the ruling party is doing, they resort to trying to physically control the chamber where the vote takes place. And their staffers are enlisted into a day or two of shoving, pushing, furniture stacking and unstacking, barricading doors, occupying podiums, yelling, singing, hair-pulling and so on.

Generally, it is mayhem that stays within limits. For instance, in July 2009 when opposition lawmakers engaged in fisticuffs to express displeasure with media-reform bills, they made a deal with ruling lawmakers to shove each other with their chests and shoulders and not lift their arms and hands to each other, according to staffers.

...

This is from a much longer blog post with lots of pictures.

What does KORUS FTA mean for your portfolio?

Seeking Alpha: How 'Free Trade' Impacts My Portfolio

Ideas about, but no solutions to, the TPA problem

The original Korea-U.S. FTA agreement was signed in time (July 1, 2007)  to qualify for expedited consideration by Congress under Trade Promotion Authority (TPA or fast track).  But this supplemental agreement, which changes specific elements of the original, was not.

Scott Lincicome lays out options, with their shortcomings, here: KORUS and TPA, ctd.  Highly recommended.  It's apparent there's no bullet-proof way forward.

Jobs?

Will KORUS FTA create the jobs the administration is hoping for (Obama: South Korea free-trade deal will create U.S. jobs)?  Will it lead to the job losses its left-wing opponents claim (Free Trade Agreement with Korea will cost U.S. jobs)?  

Paul Krugman says that  "Trade Does Not Equal Jobs":

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):

Does TPA apply?

Scott Lincicome's KORUS Afterthoughts include questions about the applicability of the Trade Promotion Authority (Fast Track) to the supplementary deal:

People who don't like the new (KORUS) deal

Congressman Michaud of Maine doesn't like it: Michaud Responds to Deal on Korea-US Trade Agreement.  

Neither does Lori Wallach of Public Citizen’s Global Trade Watch: Obama’s Decision to Push Bush’s NAFTA-Style Korea Trade Deal Without Real Fixes Is Major Policy, Political Mistake.

Max Baucus, Democrat from Montana, and chair of the Senate Finance Committee, thinks more should have been done to address Korean restrictions on beef imports: Baucus Deeply Disappointed With Announcement on Korea Trade Deal, Commits to Keep Fighting for American Ranchers.

Auggie Tantillo of the American Manufacturing Trade Action Coalition is concerned (U.S. Sets Sweeping New Deal on Trade):

Even before its full details were released, trade skeptics in the U.S. assailed the deal as doing too little to protect U.S. workers. "If the flaws that industry identified in the agreement were not fixed, then this deal could offshore tens of thousands of additional U.S. manufacturing jobs," said Auggie Tantillo, executive director American Manufacturing Trade Action Coalition, which had pressed for greater action on textile industry-related tariffs and customs-enforcement language.   

Lee Tae-hoon reports for the Korea Times that Korean opposition parties in the National Assembly are not happy,  "Opposition to block ratification of FTA":

Opposition parties Sunday vowed to block the National Assembly’s endorsement of the revised free trade deal (FTA) with the United States, saying the government has made excessive concessions in the “humiliating negotiation”.

Citing a report, Sohn Hak-kyu, chairman of the main opposition Democratic Party (DP), estimated that Seoul made concessions worth 3 trillion won ($2.64 billion) to Washington in return for new demands worth 300 billion won.

The DP leader said that his party is mulling over whether to demand a complete revision of the bilateral trade deal in an attempt to seek revisions in the ratchet clause that bars going back to the pre-FTA days and the investor-state dispute (ISD) system, which allows investors to file suits against each other’s government for possible unfair treatment.

DP floor leader Park Jie-won said his party will join forces with civic groups and other opposition parties, including the Liberty Forward Party (LFP), to address the problems of the revised bilateral trade deal in an attempt to block its parliamentary ratification.

“Our party cannot tolerate the disgraceful negotiation process and will not accept the lopsided deal,” Park said shortly after Trade Minister Kim Jong-hoon’s briefing on the results of the FTA renegotiation.

Opposition parties pointed out that the timing of the renegotiation was ill-guided as it took place when the nation’s security heavily depends on U.S. forces and inter-Korean tensions reached a new peak due to Pyongyang’s artillery attack on Yeonpyeong Island on Nov. 23.

“The government failed to protect the nation’s interests by holding the talks at a time when it desperately needs military cooperation from the United States,” the LFP said in a statement.

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.

This week's FTA discussions

The U.S. and Korean trade chiefs meet near Washington tomorrow and Wednesday to work towards resolution of the issues left over from the G-20 summit in Seoul.  The U.S. is pressing Korea to give ground:

The talks are on for Tuesday

Kim Tong-hyung: "Korea, US to resume FTA talks", Korea Times.  For two days, starting Tuesday, November 30, in Columbia, Maryland.

No date yet for renewed negotiations

Korea and the U.S. have plenty to think about right (North Korean Shells Shatter Illusions of Security as Wargames Turn Deadly).  Korea's deputy minister of Foreign Affairs and Trade says that a date hasn't been set yet to renew the negotiations:

The Koreans aren't just going to give away concessions on autos and beef,

... they're going to want something in return.

The Dong-a Ilbo (New strategies prepared for next month`s FTA talks with US) reports that on Wednesday in Seoul, "a high-ranking official at the Korean Foreign Affairs and Trade Ministry" gave some hints about the Korean wish list:

The new plan is known to include the protection of Korea’s relatively vulnerable pharmaceuticals and agricultural markets. On pharmaceuticals, Seoul will ask Washington to delay by 18 months a ban on the sale of reproduced American drugs in Korea before the patents expire for the original drugs.

The Korean government will also strengthen safeguard measures for agricultural products.

In addition, adjustment of what Korean opposition parties call “poison pill” clauses is under review. These include the negative list system for services allowing the opening of all service products except those specifically prohibited and a ratchet clause that bars going back to pre-free trade deal days.

Seoul, however, will not exclude the maligned investor-state dispute settlement clause, which allows a private investor to legally challenge a host government`s public policy.

Is the U.S. KORUS FTA agenda expanding?

We were trying to get concessions from the Koreans on autos and beef.  Are we about to go after concessions on autos, beef, labor, investment, finance, targeted tariff reduction for small and medium manufactures, and more focus on trade deficit reduction: The Korea - U.S. FTA: Negotiating with Congress.

Sarah Palin...

...endorses the KORUS FTA, and free trade in general: SARAH PALIN: An Open Letter to Republican Freshmen Members of Congress:

Kevin Brady

Kevin Brady of Texas, who is likely to  be the new chair of the House Ways and Means Committee Subcommitte on Trade, has a good record on opposition to trade barriers: he voted on the right side of the trade barrier votes tracked by the Cato Institute 82% of the time.

He's also had nice things to say trade with other nations:   Key House Republican Plans Aggressive Push For Trade Deals.  But this statement from last Thursday (November 11) suggests he likes the idea of pressing Korea for additional auto and beef concessions:

Washington, DC - U.S. Congressman Kevin Brady, the top House Republican on the Trade Subcommittee of the Committee on Ways and Means, released the following statement related to the U.S.-South Korea trade agreement negotiations:

"I am disappointed that the outstanding auto and beef issues surrounding the U.S.-South Korea trade agreement have not been resolved. I hope that these issues can be resolved quickly and sufficiently so we can take full advantage of the market opportunities that this agreement presents for the United States." ...

Did Obama jump, or was he pushed?

Scott Lincicome wonders who was responsible for the FTA "debacle" in Seoul - does the fault lie with Obama, or with Congressional pressure:  Did Congressional Pressure, not White House Incompetence/Politics, Really Derail the KORUS?

Back to square one in the National Assembly?

The Korean National Assembly's Committee on Foreign Affairs and Trade approved the KORUS FTA in April, 2009, clearing the way for consideration by the full National Assembly.  That's as far as its gotten.

Now the Assembly's research arm asserts that:

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.