WASHINGTON—The U.S.-Korea Free Trade Agreement (FTA) finalized over the weekend has earned the Obama administration a rare moment of widespread praise. The agreement has vocal support across the political spectrum.
The agreement, which still has to be approved in both countries’ legislatures, is the largest of its kind signed by the United States since the North Atlantic Free Trade Agreement in 1994.
Also known as KORUS, the FTA was negotiated by George W. Bush in 2007, but remained incomplete due to opposition from the U.S. auto sector and cattle ranchers who felt that it did not go far enough in addressing their concerns.
Obama faced widespread criticism just last month for failing to sign the agreement on schedule while in the international spotlight during a visit to Korea. Obama said at the time that he would take a few weeks to continue negotiations and make it better.
The supplementary deal, which included participation by labor and the auto industry, chiefly Ford, was finalized on Saturday. The agreement includes certain provisos that will allow the auto industry to gain access to Korean markets for five years under reduced tariffs while U.S. tariffs remain in place.
Each American auto manufacturer will receive an exemption from controversial and costly safety regulation standards for its first 25,000 vehicles. And the United States has until year eight to start phasing out the current 25 percent tariff on trucks, while Korea is required to reduce its tariffs on electric cars.
The arrangement will give “U.S. automakers the time to reverse the damage caused by decades of South Korean protectionism,” said Bob King, president of United Autoworkers Union (UAW) in a statement.
King believes the deal will boost union manufacturing jobs. He is also pleased that it includes enforcement mechanisms essential to protecting those jobs.
“This agreement is an important step toward a global rule-based trade system, an important step in giving labor a real voice in trade negotiations,” he stated.
Alan Mulally, CEO of Ford Motor Company also applauded the outlines of the agreement in a statement published last Friday on the White House website.
The changes made over the last few weeks represent “standing up for American manufacturing,” said Ways and Means Committee Chairman Sander Levin (D-Mich.) in a statement.
Senate Minority Leader Mitch McConnell (R-Ky.) called the deal “a positive development,” the NY Times reported.
American Chamber of Commerce President and CEO Thomas Donohue, who had been strongly pushing for completion of the FTA, said in a statement, “the new Congress should make passage of the Korea-U.S. free trade agreement (KORUS) an immediate and urgent priority.”
According to the chamber, Korea is America’s seventh largest trading partner, and failing to accept the agreement would put us at a competitive disadvantage with the European Union, which already ratified an agreement that will go into effect on July 1, 2011.
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The most vocal opposition seems to be coming from Sen. Max Baucus (D-Mont.), a long-time supporter of the cattle and ranching communities.
Baucus, who is chairman of the Senate Finance Committee, said in a statement that he is “deeply disappointed” with the deal due to its failure to end Korea’s “unscientific ban” on U.S. beef because of mad cow disease. He said that he would reserve judgment about whether or not to support ratification of the agreement in Congress.
Although the mad cow disease scare was never proven harmful to humans, Korea barred U.S. beef completely, lifting the ban on beef products only from cattle under 30 months in 2008.
Patrick Boyle, president and CEO of The American Meat Industry (AMI), which is the nation’s largest meat and poultry association, said in a telephone interview that two years ago was when the big hurdle was crossed, since it allowed 90 percent of exports to resume. He said his organization will continue to work with Sen. Baucus on negotiations to free up the market completely, but he would not like to see the KORUS FTA held up over the issue.
AMI predicts meat sales under the FTA will increase by $2 billion and result in more than 26,700 new American jobs. AMI is encouraging Congress to ratify KORUS as soon as possible.
The agreement is widely held to be of strategic importance in strengthening economic and political relations between Korea and the United States, at a time when tensions on the Korean Peninsula are on the rise, particularly after North Korea’s recent unprovoked artillery attack on Yeonpyeong Island on Nov 13.
On Monday, Secretary of State Hillary Clinton and Minister of Foreign Affairs and Trade of the Republic of Korea Kim Sung-hwan held bilateral meetings in Washington.
“We discussed the very important Korea free trade agreement because we think it is so much in the interests of both of our countries, and we are going to be working together to expedite it with our respective governments and legislatures as quickly as possible,” said Clinton during a press conference held after the meeting.
The agreement, which still has to be approved in both countries’ legislatures, is the largest of its kind signed by the United States since the North Atlantic Free Trade Agreement in 1994.
Also known as KORUS, the FTA was negotiated by George W. Bush in 2007, but remained incomplete due to opposition from the U.S. auto sector and cattle ranchers who felt that it did not go far enough in addressing their concerns.
Obama faced widespread criticism just last month for failing to sign the agreement on schedule while in the international spotlight during a visit to Korea. Obama said at the time that he would take a few weeks to continue negotiations and make it better.
The supplementary deal, which included participation by labor and the auto industry, chiefly Ford, was finalized on Saturday. The agreement includes certain provisos that will allow the auto industry to gain access to Korean markets for five years under reduced tariffs while U.S. tariffs remain in place.
Each American auto manufacturer will receive an exemption from controversial and costly safety regulation standards for its first 25,000 vehicles. And the United States has until year eight to start phasing out the current 25 percent tariff on trucks, while Korea is required to reduce its tariffs on electric cars.
The arrangement will give “U.S. automakers the time to reverse the damage caused by decades of South Korean protectionism,” said Bob King, president of United Autoworkers Union (UAW) in a statement.
King believes the deal will boost union manufacturing jobs. He is also pleased that it includes enforcement mechanisms essential to protecting those jobs.
“This agreement is an important step toward a global rule-based trade system, an important step in giving labor a real voice in trade negotiations,” he stated.
Alan Mulally, CEO of Ford Motor Company also applauded the outlines of the agreement in a statement published last Friday on the White House website.
The changes made over the last few weeks represent “standing up for American manufacturing,” said Ways and Means Committee Chairman Sander Levin (D-Mich.) in a statement.
Senate Minority Leader Mitch McConnell (R-Ky.) called the deal “a positive development,” the NY Times reported.
American Chamber of Commerce President and CEO Thomas Donohue, who had been strongly pushing for completion of the FTA, said in a statement, “the new Congress should make passage of the Korea-U.S. free trade agreement (KORUS) an immediate and urgent priority.”
According to the chamber, Korea is America’s seventh largest trading partner, and failing to accept the agreement would put us at a competitive disadvantage with the European Union, which already ratified an agreement that will go into effect on July 1, 2011.
Continued on the next page...
The most vocal opposition seems to be coming from Sen. Max Baucus (D-Mont.), a long-time supporter of the cattle and ranching communities.
Baucus, who is chairman of the Senate Finance Committee, said in a statement that he is “deeply disappointed” with the deal due to its failure to end Korea’s “unscientific ban” on U.S. beef because of mad cow disease. He said that he would reserve judgment about whether or not to support ratification of the agreement in Congress.
Although the mad cow disease scare was never proven harmful to humans, Korea barred U.S. beef completely, lifting the ban on beef products only from cattle under 30 months in 2008.
Patrick Boyle, president and CEO of The American Meat Industry (AMI), which is the nation’s largest meat and poultry association, said in a telephone interview that two years ago was when the big hurdle was crossed, since it allowed 90 percent of exports to resume. He said his organization will continue to work with Sen. Baucus on negotiations to free up the market completely, but he would not like to see the KORUS FTA held up over the issue.
AMI predicts meat sales under the FTA will increase by $2 billion and result in more than 26,700 new American jobs. AMI is encouraging Congress to ratify KORUS as soon as possible.
The agreement is widely held to be of strategic importance in strengthening economic and political relations between Korea and the United States, at a time when tensions on the Korean Peninsula are on the rise, particularly after North Korea’s recent unprovoked artillery attack on Yeonpyeong Island on Nov 13.
On Monday, Secretary of State Hillary Clinton and Minister of Foreign Affairs and Trade of the Republic of Korea Kim Sung-hwan held bilateral meetings in Washington.
“We discussed the very important Korea free trade agreement because we think it is so much in the interests of both of our countries, and we are going to be working together to expedite it with our respective governments and legislatures as quickly as possible,” said Clinton during a press conference held after the meeting.
