Korea-U.S. FTA

Two U.S. business coalitions endorse KFTA

The National Association of Manufacturers (NAM) and the Emergency Committee for American Trade (ECAT) both like it.

KFTA ratification won't be easy

Kim Deok-hyun, noting that the agreement doesn't become effective until 60 days after both countries ratify it, looks at the prospects for ratification in both the U.S. and Korea: South Korea, U.S. face bumpy road to passages of free trade agreement (Yonhap News, June 29).  He sees what may be a long, hard, road ahead.

Ratification may not come quickly in South Korea:

"In South Korea, the National Assembly may not take steps to ratify it before the Dec. 19 presidential election," said Sung Han-kyung, a research fellow at the state-run Korea Institute for International Economic Policy, citing the chaos in Korea's political parties.

Such steps are unlikely to take place during the first half of next year as South Korea is awaiting a general election in April to pick lawmakers for the National Assembly, Sung said.

Many analysts say the parliamentary vote would occur as early as in the second half of next year. Two-thirds approval in the 299-member unicameral parliament is needed to ratify the deal.

When the South Korean parliament endorsed its first free trade deal with Chile, it took three years from the signing of the agreement.

Kim's discussion of the U.S. is based on remarks by Jeffrey Schott of the Peterson Institute.  Schott says Congress won't act until Korea fully opens its market to U.S. beef.  He expects the Administration to submit the implementing text to Congress this fall.

Doug Palmer reports for Reuters that some think U.S. ratification could be delayed even longer: U.S., South Korea sign trade pact; face Congress fight (via ABC News, June 30):

U.S. business groups outside the auto sector are ready to make a strong push for Congress to approve the pact. But some fear it could be delayed until after the 2008 U.S. elections.

The Korean agreement was the last trade deal to be signed before the expiration of Bush administration's trade promotion authority at midnight on Saturday after five years in force.

That legislation has allowed the White House to negotiate trade deals Congress must approve or reject within 90 days of receiving them without making changes.

By signing the pact on Saturday, it has that protection no matter when the White House submits it to Congress. South Korea's National Assembly also must approve the pact.

Revised KORUS FTA signed today

The U.S. and Korea signed the FTA agreement today, after Korea agreed to certain revisions this past week.  Mark Drajem reports for Bloomberg: South Korea, U.S. Sign Free-Trade Accord; Fight Looms (June 30):

South Korea and the U.S. signed a free-trade agreement today that aims to open the Korean economy to more foreign investment and forge new links for American companies with the fast-growing Asian region.

The agreement, which faces opposition from Democratic leaders in the U.S. Congress, was signed by U.S. Trade Representative Susan Schwab and Korean Trade Minister Kim Hyun Chong in Washington today. It's estimated to add $29 billion to the countries' $78 billion-a-year commercial relationship....

Yesterday, Democratic leaders in the House said they wouldn't support the bill as it is, singling out its car and truck provisions as a special concern.  Today, however, Schwab ruled out further changes to the agreement:

Schwab ruled out making any future amendments to the agreement in order to garner more votes from lawmakers: ``This agreement will stand,'' she said at the ceremony on Capitol Hill.

House Democrats say the Korea-U.S. FTA is going nowhere

The House Democratic leadership says it won't support the Korea-U.S. FTA: Pelosi, Hoyer, Rangel, and Levin Statement on Trade (Speaker Pelosi's web site, June 29).  Here's the section on the KFTA:

“Tomorrow, the United States and the Republic of Korea will sign a free trade agreement. Properly negotiated, a South Korea-U.S. FTA (KFTA) would provide key benefits to American workers, farmers, and businesses.

“Unfortunately, the KFTA as currently negotiated is a missed opportunity.  The agreement does not address in an effective manner the persistent problem of non-tariff barriers, particularly those blocking access of U.S. manufactured products in South Korea’s market. That is particularly the case in the automotive sector where last year, South Korea exported more than 700,000 cars into the U.S., while the United States exported fewer than 5,000. These numbers illustrate deep-seated and fundamental problems in market access and a heavily one-sided trading relationship that can be expected only to undercut support for the agreement far beyond the automotive sector.

“As a consequence, we cannot support the KFTA as currently negotiated.

The author of this story on the Democratic statement apparently seizes on the "as currently negotiated" and suggests that no for now doesn't mean there's not a way around: Pelosi indicates delays on Bush-backed trade deals (Ian Swanson, The Hill, June 29):

Deals with South Korea and Colombia face high hurdles, the statement made clear. It said concerns about violence in Colombia could not be resolved through a trade agreement. In the case of the Korean deal, the statement said the administration had not done enough to remove barriers to U.S. auto exports.

House Democrats Say They Can't Support the Agreement

On June 29, the day before the agreement was signed by the U.S. and Korea, key House Democrats said they wouldn't be able to support the agreement as negotiated: Pelosi, Hoyer, Rangel, and Levin Statement on Trade (pess release).  The press release covered several trade issues.  Here is the KORUS FTA text:

Korea-U.S. FTA agreement to be signed tomorrow

The U.S. and Korea have agreed on changes to make the deal compliant with the new -informal - Congressional guidelines, and will meet the June 30 signing target.  It's necessary to sign by June 30 to meet trade promotion authority requirements for expedited Congressional consideration.  The two trade ministers will meet to sign tomorrow morning in Washington. Two ratification fights next: S Korea-US trade deal clears hurdle (Anna Fifield, Financial Times, June 29)

Wheat weighs in. We want the FTA!

The Chairman of the U.S. Wheat Associates, and the President of the National Association of Wheat Growers, say the wheat industry supports the FTA: U.S. Wheat Industry Supports Korean Free Trade Agreement (Truth About Trade and Technology, June 26):

KORUS and Korean health care - a critical view

Sean Flynn of the Washington School of Law at American University, and Mike Palmedo of CPTech, provided preliminary thoughts on the draft agreement on May 25, when the text was released: PIJIP Comments on the Korus FTA Pharmaceuticals and IP Chapters. (the PIJIP is the Program on Information Justice and Intellectual Property at the Washington School).

Four or five pages argue that:

June's Supplementary Negotiations: Round 2

Korea and the U.S. have started a second round of negotiations to adapt the FTA to take account of the new provisions required by Congress on May 10 (Additional Congressional Trade Policy Guidance): S. Korea, U.S. begin second round of FTA revision talks (Yonhap News, June 26):

South Korea and the United States on Monday began a second round of negotiations here [in Washington - Ben] on potential revisions to their draft free trade agreement (FTA) that needs to be signed by the presidents by the end of the week.

Kim Hyun-chong, South Korea's trade minister, went into the three-day talks with his American counterpart, U.S. Trade Representative Susan Schwab, after a brief photo opportunity without taking any questions from the press.

Another story from The Hankyoreh covers the same ground: South Korea, U.S. to hold more talks on FTA revisions this week (June 25).  Neither story gives information on the content of the discussions.

Last week's first round was conducted at the ambassadorial level between chief trade negotiators Wendy Cutler and Kim Jong-hoon.  This week its been taken up a notch to the Ministerial level. Everyone's working against a June 30 (Saturday) target for signing of the agreements in order to meet U.S. trade promotion authority requirments.

June's supplementary negotiations

The U.S. is interested in revising or creating an interpretation of the agreement so that understandings are consistent with the provisions of the agreement between the Administration and Congress in May 10 [see The content of changes in U.S. trade negotiating policy (May 11, with later revisions); The Administration's trade treaty with Congress (May 24, with lots of later revisions); What Are the Implications of the Trade Treaty Between the Administration and Congress? (June 5)]

The U.S. and Korea discussed the U.S. proposals this week on the 21st and 22nd in the Foreign Ministry building in Seoul.