Trade pact receives mixed responses

By Kim Yoo-chul

South Korea's business sectors are showing mixed responses to the free trade agreement (FTA) signed between Seoul and Washington over the weekend.

The nation’s top two business lobbies similarly hailed the announcement followed by the American business community here ― the American Chamber of Commerce in Korea (AMCHAM).

The car industry expressed support for the pact, expecting South Korea’s auto majors to export more to the world’s biggest consumer electronics market. But the electronics industry remained calm over the impact of the accord.

``The agreement will help businesses wash away uncertainties in the United States market and South Korean companies will export more, boosting brand awareness,’’ said the Federation of Korean Industries (FKI), the nation’s most influential business lobby group, in a statement, Sunday.

In a separate statement, the Korea Chamber of Commerce and Industry (KCCI), asked for an imminent ratification of the pact by insisting that the agreement will maximize ``economic benefits’’ both for South Korea and the United States.

``We more than welcome the agreement. The FTA will also significantly help strengthen the mutual ties amid an increased `country risk’ by threats from North Korea,’’ said the body.

AMCHAM Chairman David Ruch said the agreement is critical to the economies of both nations but particularly to the durable recovery of the U.S. job market.

``Not only does the FTA contain many benefits for both countries, but we are also very aware that the Korea-EU FTA is expected to go into effect in July 2011,’’ Ruch said, adding the announcement is one he has been waiting to hear for a long time.

South Korea and the United States have reached a final agreement for the free trade pact after marathon negotiations. The talks had been stalled for three years by disagreements over auto tariffs.

Seoul compromised and addressed critical U.S. concerns on automobiles and said it received benefits in return, such as the U.S. agreeing to a two-year delay in the elimination of South Korean tariffs on port imports.

``Anyhow, the agreement will pave the way for South Korean automakers to sell more cars in the United States and to help parts suppliers expand exports,’’ said the Korea Automobile Manufacturers Association (KAMA), in a statement.

``We expect the pact to be effective as early as possible,’’ it added.

The nation’s top two consumer electronics majors ― Samsung Electronics and LG Electronics ― haven’t issued any official statements, but added the pact will further spur the demand for consumer electronics products.

``We don’t see any imminent positive impact on the agreement as Samsung is already freed from any tariffs on televisions, memory chips and handsets as we operate manufacturing facilities in Mexico,’’ said a Samsung Electronics spokesman.

An LG Electronics spokesman said his company sees future price competitiveness in the United States as some premium products manufactured in South Korea will be freed from tariff burdens.

``The impact on the elimination of the 8 percent import tax on U.S. products in Korea will be minimized considering strengthened market positions by South Korean companies on their home-turf,’’ said a KCCI official.