Trade minister quashes talk of FTA renegotiations with U.S.
JoongAng Ilbo, Korea
Trade minister quashes talk of FTA renegotiations with U.S.
17 January 2009
Korea’s top trade official said yesterday renegotiation of a free trade agreement with the United States would not be sensible, rejecting possible demand to amend the deal by the new administration of President-elect Barack Obama.
Obama, a Democrat, has said he favors free trade that benefits the United States, but has strongly criticized the deal with Korea, known as the KORUS FTA, saying it does not adequately address an imbalance in auto trade.
Some politicians in the U.S. have recently underscored the need for Korea to renegotiate provisions of the pacts covering trade in autos and other manufactured goods.
“If the U.S. really wants to renegotiate the agreement, I think it is not sensible, and the U.S. should not do so,” Trade Minister Kim Jong-hoon said in an interview with Yonhap News Agency.
Earlier this week, U.S. Secretary of State-designate Hillary Clinton, in written responses to questions from the Senate Foreign Relations Committee, echoed Obama’s opposition to the free trade agreement with South Korea, still awaiting legislative approval from both countries after being signed in June 2007.
House of Representatives Ways and Means Committee Chairman Charles Rangel also called for renegotiation of the KORUS FTA over the auto issue. The 56-year-old Kim said he does not view Hillary Clinton’s remarks as implying that Washington is willing to renegotiate. “Confirmation hearings are part of the political process, and she has to pass the hearing,” said Kim, who served as Seoul’s chief negotiator for the deal during the 17-month talks.
But many Democrats believe auto provisions strongly favor Korea’s automakers and demand renegotiations of the trade accord. Korea sold more than 700,000 vehicles in the U.S. in 2007, 100 times the number of American cars it imported, according to an industry tally. Under the free trade deal, the two sides agreed to cut and phase out tariffs on autos. Seoul agreed to change its tax system for larger vehicles, which the U.S. labeled as discriminatory.
“If the U.S. automakers want to increase their market share in Korea, the KORUS FTA would be a good opportunity for them,” Kim said. “All the things they have sought for years are put into the pact.”
The accord is the largest for the U.S. since the North American Free Trade Agreement with Canada and Mexico and the biggest ever for Korea. The bill, if ratified, will knock down tariff and non-tariff barriers between the two economies, which did $78.4 billion in two-way trade in 2007.
The agreement has yet to be put to a vote in either the U.S. or Korean legislatures, though Kim says South Korea should ratify the deal first.
“It will take time for the U.S. to ratify the deal as the upcoming administration’s priority is to revive the economy,” Kim said.
“Should ratification be delayed, it could lead to more complicated problems. We should do it first.”
Korean President Lee Myung-bak and his Grand National Party have refused to renegotiate the trade pact. Rather, Lee and the ruling party have tried to win approval of the pact in its own legislature, hoping that would put pressure on Washington to ratify the deal.
But opposition lawmakers occupied the National Assembly for two weeks last month in an effort to prevent the ruling party from bringing the accord to a vote. The ruling and opposition parties agreed to postpone the vote until after Obama takes office. Yonhap
