USTR Appeals for Last Push on FTA
By Kim Hyun-cheol
Staff Reporter
The Great Depression triggered by the Wall Street Crash of 1929 lasted for a decade, with trade protectionism cited as one of the key reasons. Perhaps in an effort to avoid a repeat, the United States is trying to push for the ratification of a free trade pact with Korea at a point when its President George W. Bush is about to leave office with protectionist Barack Obama, the Democratic presidential candidate, favored to succeed him.
The U.S. Trade Representative (USTR) posted documents on its Web site, Monday, promoting the Korea-U.S. FTA (KORUS FTA), whose ratification by the legislatures of both countries is still pending.
The USTR said the pact will largely benefit the country because it will further open a major market for U.S. exports; level the playing field for American businesses, farmers and workers; strengthen economic reform; ensure America a competitive position in East Asia; and also anchor longstanding ties with a vital regional ally.
``The entry into force of the KORUS FTA will have significant benefits, building on the annual U.S.-Korea trade of more than $82 billion worth of goods and more than $19 billion in services in 2007,'' the USTR said.
``By boosting economic ties and broadening and modernizing our longstanding alliance, it promises to become the pillar of our alliance for the next 50 years, as the Mutual Defense Treaty has been for the last 50 years.''
The trade body also refuted a recent claim by Senator Obama, saying the agreement contains an unprecedented package of automotive related provisions, including a unique dispute settlement mechanism that will level the playing field for U.S. automakers in the important market.
In the third and last presidential debate broadcast live on Oct. 15, Obama opposed the FTA with Korea because it was unfair with regards to the auto trade. Even before that, he has been consistently against the trade pact, criticizing it is ``badly flawed,'' and also has asked President Bush for a renegotiation along with fellow Democrats.
``When it comes to South Korea, we've got a trade agreement up right now ― they are sending hundreds of thousands of South Korean cars into the United States ― that's all good, (but) we can only get 4,000 to 5,000 into South Korea,'' Obama said.
Opinions are divided even among U.S. carmakers. General Motors, which has purportedly sought $10 billion in aid from the federal government recently, is neutral about the KORUS FTA, but the other two top makers, Ford and Chrysler, are strongly opposing the pact in an alliance with United Auto Workers.
Korea, the world's 13th largest economy, is the seventh largest goods trading partner of the United States. The KORUS FTA is the biggest trade agreement America has made in nearly 15 years. Seoul submitted a motion for ratification to the National Assembly earlier this month.
Once put into action, the pact is expected to add at least $10 billion to U.S GDP and increase exports to South Korea by $10-11 billion annually, according to the International Trade Commission, an independent U.S. federal agency.
Meanwhile, the two countries held two days of trade talks starting Tuesday in Washington, but without addressing the issue of auto industry provisions, the USTR said.