FTA Debate Strains Korea-US Ties
By Michael Ha
Staff Reporter
The governing and opposition political parties are at odds over how to handle the pending Korea-U.S. Free Trade Agreement (KORUS FTA), which is now facing increasing scrutiny in Washington. At issue is the allegedly lopsided automobile trade between the two countries.
U.S. President-elect Barack Obama made it clear that saving U.S. automakers will be a top priority in his economic stimulus plan. That makes the auto trade issue a sticking point in the KORUS FTA. Before lending its support to the agreement, the Obama administration may try to revise the deal so that more American cars can be sold in Korea.
U.S. automakers are continuing to post staggering losses. General Motors and Ford Motor both reported billions of dollars in operating losses in the third quarter. GM, in particular, even said the company might not survive after this year if it doesn't get a cash loan from the government.
The U.S. auto industry was a major topic during Obama's first-ever press conference as President-elect last week.
``I have made it a high priority for my transition team to work on additional policy options to help the auto industry adjust, weather the financial crisis and succeed in producing fuel-efficient cars here in the United States of America,'' he said.
Obama said ``The auto industry is the backbone of American manufacturing and a critical part of our attempt to reduce our dependence on foreign oil.''
Last month at a Washington forum, Obama's Korea policy advisor Frank Jannuzi also expressed his concern at the auto trade imbalance between Korea and the United States.
``It cannot be a good thing that the United States exports 5,000 automobiles a year to Korea and Korea exports 700,000 automobiles to here. And the price for this is not paid, with all due respect, by politicians. It's paid by American workers. So, we need to do some work.''
Many Seoul policymakers said the unpopularity of American cars here is due to their lack of competitiveness and high prices, not the protective nature of Korean laws and regulations.
A Seoulite driving a foreign car says, ``Who will buy the gas-guzzling, unstylish, expensive American vehicle?'' Obama cannot force consumers to buy his locally-made car, he added.
One possibility is that U.S. Congress, during its lame-duck session during the remainder of the year, might ratify the deal. But many observers say that's not a likely scenario since Washington lawmakers are now preoccupied with crafting an economic stimulus package and that there may not be enough time to bring up the KORUS FTA issue for debate.
In Seoul, the governing Grand National Party and opposition forces are divided over how best to handle the issue. The Lee Myung-bak administration and most GNP leaders want the National Assembly to swiftly approve the deal. Their rationale is that if Seoul officially ratifies the agreement, it will put pressure on American lawmakers to do likewise.
South Korea's chief trade negotiator Lee Hye-min said in a radio interview that Washington has little to gain by renegotiating, even just portions concerning the automobile trade. He said the United States would lose the international business community's trust if it tries to revise the agreement.
Opposition party legislators argue U.S. lawmakers won't be in any hurry to ratify the deal just because Korea approves it first. They point to international precedents where the United States has asked for renegotiations after agreeing to trade deals. With American automakers' financial health getting worse by the day, the U.S. Congress would have little to gain politically by quickly ratifying the deal that some say would hurt American workers.
Some opposition party leaders say it would be difficult ― maybe even impossible ― for Korea to avoid renegotiation if that's what the United States really wants. They say instead of trying to dodge what is probably inevitable, Korea should instead embrace this opportunity to take another look at the KORUS FTA.
Some lawmakers of the opposition Democratic Party (DP) say the Seoul government should take this opportunity and figure out other areas to renegotiate that could help Korean businesses.
Opposition lawmakers say Seoul could assist the struggling agricultural sector by revising relevant parts of the agreement.