FTA goes beyond trade for allies

By Kim Young-jin

With Presidents Lee Myung-bak and Barack Obama toasting the ratification of the Korea-U.S. free trade agreement (KORUS FTA) by Congress Wednesday, attention understandably focused on the economic benefits each side stands to gain.

But analysts said the U.S. passage of the long-pending pact also had major strategic implications for Asia by strengthening America’s role in a region it prioritizes. The FTA still needs parliamentary approval here.

With draw-downs in the wars in Afghanistan and Iraq, the Obama administration has been stressing the importance of the Asia-Pacific region to U.S. policy, calling for a major expansion of interests in economic, diplomatic and other realms.

Kang Seon-jou, a professor of political economics at the Institute of Foreign Affairs and National Security, said the ratification earned the policy credibility points, proving Washington’s political will to engage the region.

“The United States now gains leverage in dealing with regional issues including North Korea, disputes in the South China Sea and other areas of competition,” she said.

Home to some of the world’s largest and fastest-growing economies, the region is nonetheless dogged by concerns such as North Korea’s nuclear program and belligerence as well as Beijing’s growing assertiveness over sea disputes.

Daniel Pinkston of the International Crisis Group think tank in Seoul said that greater investment in Korea following the FTA would up the ante for the United States to work for regional stability.

“Increased economic ties are linked to common security interests and maintaining peace and security in the region,” he said.

In an article in Foreign Policy, Secretary of State Hillary Clinton said one of the most important tasks for the United States was to “lock in a substantially increased investment, diplomatic, economic, strategic and otherwise, in Asia-Pacific.”

President Lee, meanwhile, who has sought to shore up the key alliance, has done so by adding strengthened economic ties to the traditional political and military ones.

For Asian leaders, trade with the United States is also seen as a counterbalance to the region’s growing dependence on China. Though the world’s second-largest economy, questions linger over Beijing’s role on the international stage.

The Asian giant is said to protect North Korea from international sanctions and look the other way over its proliferation activities.

Analysts say the sides are in lock-step coordination in efforts to deter the North’s belligerence as well as preconditions Pyongyang must meet to resume multilateral denuclearization negotiations.

Both sides have recently met with the North in a bid to coax it to halt its nuclear programs, allow international inspections and improve cross border ties, steps they deem necessary before six-party talks take place.

While analysts don’t preclude further provocative behavior by Pyongyang, especially if efforts to revive the talks fall through, Kang said the greater U.S. presence would at least add a dose of stability to investment jitters over such moves.

“Korea-U.S. relations have become more mature and stable over the last five years and the FTA would help further lessen the perceived ‘Korea risk premium’ despite occasional provocations,” she said.