Troy Stangarone |
By Troy Stangarone
Nearly one year after the United States and Korea concluded negotiations on the KORUS FTA, President Lee Myung-bak is making his first visit to the United States seeking to build support for the agreement's passage. However, on arrival, he will find an increasingly volatile political climate when it comes to trade.
Over the last few years, support for trade has been slipping in the United States, with recent surveys indicating that even its traditional support among Republicans is eroding.
Much of the anxiety that Americans feel regarding trade has come to the surface this year in the form of increasingly hostile rhetoric toward trade in the Democratic presidential primary.
Last week, these concerns spilled over in a procedural dispute between the administration and Congress.
With time running out to ensure consideration of the Colombia FTA this year; President George W. Bush submitted the agreement to Congress without the consent of the Congressional leadership. In response, the House leadership stripped the Colombia FTA of the requirement that Congress vote on the accord within 90 legislative days.
While the House's move may seem like an obscure change, it strikes directly at the heart of a compromise that allows the United States to conduct trade policy, that every agreement is assured a vote. Without such an assurance, an agreement could languish indefinitely without the prospect for passage.
The immediate impact for the KORUS FTA is to signal Congress' reluctance to vote on trade agreements in the current political climate before the November election.
If there is one iron-clad rule of democratic politics, it is that politicians do not like to take politically sensitive votes just before an election if they do not have to.
This reluctance to face politically sensitive issues is not limited to the United States, but has played out recently in Korea with the reluctance of the National Assembly to pass the KORUS FTA prior to its elections or to resolve the dispute over U.S. beef. So, while the prospects for the FTA's short-term passage should be dampened, its long-term prospects should not dim.
To ensure the agreement's passage in the long-term, Korea must reopen its market to U.S. beef. It would be understandable if the first reaction in Korea would be to pull back from any decision to avoid the domestic political costs of reopening its market to all U.S. beef in compliance with the World Organization for Animal Health's guidelines, but that would be a mistake.
The KORUS FTA currently finds itself hostage to the politics of the Colombia FTA because of the reluctance to resolve this issue.
Should there be any grand bargain between the administration and the Congress to pass the Colombia FTA, Korea ensures that it could not take advantage of such an opportunity by continuing to hold back. The only way Korea can ensure that it does not again find the FTA hostage to an unforeseen political event is to resolve this issue.
More importantly, Korea should resolve this issue for its own interest. The price of many food products is at a record high, and Korean consumers often face some of the highest prices in the world.
As the immediate drop in the price of beef during last year's brief partial opening to U.S. beef demonstrated, every Korean consumer would benefit from the return of U.S. beef in the form of lower prices.
At a time of record high food prices, the FTA offers an immediate benefit to every Korean consumer in the prospect of relief from more than merely high beef prices.
Aside from agriculture, the agreement will immediately remove tariffs on nearly 95 percent of goods, and will liberalize Korea's service market.
In an ever more competitive world, the agreement will benefit the Korean economy in significant ways that go beyond a wider variety of goods and lower consumer prices.
The agreement will provide permanent, preferential access to the world's largest consumer market that will give Korean producers an advantage over their competitors, including Japan and China.
However, as Korea seeks to move beyond being a manufacturer of goods, the opening of the services market under the agreement will help to fuel the growth of the Korean service industry.
While Korea has much to gain from the agreement, so does the United States. For President Lee to have a successful trip to the United States, he should remind Congress of this fact.
However, beyond the pure commercial aspects of the agreement, he should remind them of the friendship between the United States and Korea, as well as the ability of the agreement to strengthen the alliance between the two nations.
The FTA will move the alliance between Korea and the United States into the 21st century by giving it an important economic component, formalizing what has long been a reality in the two nations' relations.
While the timing of Congress' decision on the Colombia agreement is lamentable, it should not be seen as an obstacle to a successful trip.
If President Lee were to announce a breakthrough on the beef issue while in Washington, D.C., and remind the Congress of the importance of the FTA to both nations and the alliance, he will have laid the foundation for the agreement's eventual passage.
The writer is director of Congressional affairs and trade at the Korea Economic Institute of America. ― ED.
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yistory@koreatimes.co.kr
