The Hankyoreh | Aug. 24, 2017
Pharmaceutical prices, intellectual property rights emerge as key issues in KORUS FTA discussions
US Trade Representative cites ‘burdensome regulations’ in push to revise deal
By aggressively focusing on American pharmaceutical prices and intellectual property rights in talks to revise the Korea-US Free Trade Agreement (KORUS FTA), US representatives seemed to strategically promote American interests in various categories under the guise of "negotiation and amendments."
On Aug. 22, at a special session of the Joint KORUS FTA Committee in Seoul, the US focused on three major issues: trade imbalances between the two countries, fulfillment of the original agreement terms, and possible revisions and amendments. Rather than suggesting a general revision, the US openly sought to bridge its trade deficit with Korea by renegotiating specific terms for individual product categories.
"Unfortunately, too many American workers have not benefited from the agreement," said Robert Lighthizer, the United States Trade Representative. Lighthizer emphasized that the US will continue to focus on issues including fulfilling the agreement’s terms and terms for revision. Song Gi-ho, head of the international trade committee of Lawyers for a Democratic Society (MINBYUN), warned that "This meeting was more than just a simple talk about revisions. The US won’t stop at basic FTA reforms, they’ll focus on intellectual property rights so as to push a broad spectrum of American corporate interests."
Lighthizer emphasized the need to address "burdensome regulations which often exclude US firms or artificially set prices for American intellectual property." The intellectual property he’s referring to is likely related to American patent drugs. Korean pharmaceuticals that fall under the national health insurance plan are effectively cheaper than their American counterparts, which naturally increases the demand for domestic drugs and thereby prevents American pharmaceutical companies from fully profiting from patent drugs under the current trade agreement.
The Americans’ issue on the intellectual property issue was indeed confirmed during the meeting on Aug. 22. "US representatives raised the issue of automobile and steel trade imbalances between the two countries, as well as with IT products," said Minister of Trade Kim Hyun-chong during the meeting’s media briefing.
Observers have interpreted Kim’s comments to mean that the US directly referred to American intellectual property rights in software and the IT industry at the negotiation table. US representatives claim that the export of American services to Korea have not increased since the trade deal became active five years ago, yet Korea’s service industry and intellectual property are at a chronic deficit when it comes to trade with the US.
According to statistics from the US Department of Commerce, the US has generated US $10.1 billion in profit by exporting services to Korea. This is nearly 1.5 times the profit generated before the trade deal became active in 2011 (US $6.9 billion). Even in commercial goods, the US saw a 30 percent reduction this year in their trade deficit with Korea. The US trade deficit with Korea in commercial goods was around US $9.5 billion as of this past July, a significant decrease from last year’s deficit (US $27.7 billion).
Lighthizer stated that discussion between the two nations regarding the issues brought up at the special session will continue for the next few weeks.
By Cho Gye-wan, staff reporter
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