By Jung Sung-ki
Business organizations here hailed the passage of the long-stalled Korea-U.S. free trade agreement (KORUS FTA) by U.S. Congress, hopeful of positive impacts when the landmark trade pact goes into effect next year.
In contrast, small retailers and service businesses expressed concerns that the inroads of advanced U.S. franchises will substantially chip away at their bottom lines.
The business community Thursday urged the country’s unicameral parliament to ratify the trade agreement as soon as possible to help fuel trade and economic growth.
“The FTA with the world’s largest consumer market will help raise the global profile of Korean-made products, such as cars, automotive parts, textiles and electronic products and promote their global competitiveness,” the Federation of Korean Industries (FKI), a large business lobby, said in a statement.
“The implementation of the KORUS FTA must not be delayed further, so we urge the National Assembly to ratify the pact quickly before the regular session of the Assembly ends,” the statement said. “By doing so, we hope South Korean companies will enter the U.S. market and compete there.”
The Korea Chamber of Commerce and Industry (KCCI) expected the FTA ratification would help South Korea become a Northeast Asian hub for trade with world economies.
“Countries under trade agreements with the United States have collected more direct investment from the United States than before. This could be the case for South Korea, too,” a KCCI spokesman said.
The Korea International Trade Association said the trade pact would help the nation increase its two-way trade to $1 trillion this year and solidify political and diplomatic ties between Seoul and Washington, which could eventually benefit the national economy.
The business organizations said the trade deal, once in effect, can help the country’s gross domestic product rise by 5.6 percent over the next decade and create 350,000 new jobs.
In addition, the KORUS FTA will give South Korea more leverage in pending FTA negotiations with other countries, including Canada and Australia, according to the organizations.
On the flip side, small retailers are worried that an inflow of American franchises will endanger their livelihoods and possibly lead to serious social problems down the road.
The agreement, originally signed in June 2007 and revised last year, has failed to gain parliamentary endorsement due to political wrangling.
The ruling Grand National Party, which holds a majority in the 299-seat Assembly, pledged to get the motion approved as soon as possible so that it can take effect as scheduled next January.
In an unusually speedy legislative process, the U.S. Senate and House of Representatives approved the free trade pact with South Korea Wednesday.
The move comes as South Korean President Lee Myung-bak is on a state visit to the United States. He is scheduled to hold summit talks with President Barack Obama and deliver a speech in a joint session of the Senate and the House on Thursday.