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Nov-06-2009US Wants South Korea to Remove Auto-Sale Barriers, Kirk Says(topic overview)
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All we are asking for is for our own auto companies to be able to compete on a level playing field in the Korean market," U.S. Trade Representative Ron Kirk said in the prepared text of a speech. Kirk, who will meet with South Korea's trade minister next week in Singapore, told the U.S. -Korea Business Council his office was developing proposals to address concerns about Korea's barriers to U.S. autos, beef and other products. "Precisely because our political and economic relationship is so important, we have to get this right. We need the broadest political support to move forward," Kirk said, adding he had a commitment to his Korean counterpart to see the free trade agreement through to its conclusion. Obama opposed the U.S. -Korea free trade agreement during last year's campaign, but also pledged in his meetings with South Korea President Lee Myung-bak this year to work to remove obstacles to approval of the pact. Trade agreements are unpopular with many of Obama's fellow Democrats in Congress, whose support he needs for his top domestic priority of passing healthcare reform. [1] Myron Brilliant, the outgoing head of the US-Korea Business Council, appealed for quick passage of the deal, complaining that U.S. businesses were at a disadvantage as South Korea recently sealed a trade pact with the European Union. Kirk acknowledged that many business leaders before him were growing impatient but said that the Obama administration wanted to engage in an "honest dialogue" with the public on trade. "President Obama and I are very much concerned that it's time that America begin to pay atention to those who have been critical or may not be as strong believers in our trade policy," Kirk said.[2]
The deal is the first by India with a developed economy and South Korea's eighth free trade pact, including deals to open up markets with the United States and the European Union that have yet to be implemented.[3] An economic affairs official at the Indian Embassy in Seoul could not immediately be reached for comment. South Korea has been aggressively pursuing free trade agreements as part of a national strategy to boost its economy and increase opportunities for its companies, including heavyweight exporters like electronics maker Samsung and automaker Hyundai. The country has concluded accords with the United States and the European Union, though both remain unratified.[4]
Brilliant feared any further delay in the Korea FTA's ratification will undermine U.S. products' competitiveness in South Korea, the seventh-largest trading partner of the U.S. with trade in goods reaching US$83 billion in 2008 and trade in services reaching $19 billion in 2007. "But the European Union recently concluded its own agreement with Korea, potentially putting U.S. exporters at a disadvantage in the Korean market and endangering U.S. jobs."[5] "Korea is one of the largest global customers of U.S. goods and services, and Korean companies are increasingly investing in the U.S. market,' Brilliant said. "But the European Union recently concluded its own agreement with Korea, potentially putting U.S. exporters at a disadvantage in the Korean market and endangering U.S. jobs.[6]
We need the broadest possible political support to move forward." "In their discussions, President Obama and President Lee have both reiterated the need to avoid protectionism and economic nationalism." "As the economy struggles to rebound, this agreement is an immediate job-creating stimulus." "But the European Union recently concluded its own agreement with Korea, potentially putting U.S. exporters at a disadvantage in the Korean market and endangering U.S. jobs."[7]
Completed approval on Tuesday of the Treaty of Lisbon by member states of the European Union could ease the European Union's ratification process of the free-trade agreement initialed with Korea last month, a Seoul Trade Ministry official said yesterday.[8] "The Lisbon Treaty would give more authority to the European Commission, the EU's executive, which has been responsible for all the FTA negotiations," an official at Seoul's Ministry of Foreign Affairs and Trade told The Korea Herald, declining to be identified. "This would mean the EU could ratify a trade accord without having to go through the complicated process of getting individual approval from all 27 member states," she explained. Czech President Vaclav Klaus signed the Lisbon Treaty on Tuesday, the last EU country to ratify the treaty aimed at strengthening the bloc's global leadership, enhancing its foreign policy, and raising operational efficiency and coherence. The treaty would also give the bloc its first long-term president.[8]
The historic FTA would eliminate or phase out tariffs on 99.4 percent of EU goods shipped to Korea and 95.8 percent of Korean goods exported to the European trade bloc, all within a three-year period.[8]
South Korea on Friday ratified a free trade deal with India that promises to slash tariffs on goods and services between two of Asia's biggest economies.[4] SEOUL (Reuters) - South Korea's parliament on Friday ratified a free trade deal with India, opening the way to the elimination or lowering of tariffs on more than $15 billion in annual bilateral trade with Asia's third largest economy.[3]
SEOUL - SOUTH Korea's parliament ratified a free trade agreement with India on Friday, giving the country a lead over its major Asian rivals in a market of 1.1 billion people.[9]
WASHINGTON, Nov 5 (Reuters) - South Korea must do more to open its market to U.S. cars before President Barack Obama will send a free trade agreement signed in June 2007 to Congress for a vote, the chief U.S. trade negotiator said on Thursday. The remarks offered little hope of a breakthrough during Obama's trip to Asia this month that might lead to congressional action on the pact, which is strongly opposed by many lawmakers from auto-producing states.[1] WASHINGTON — The top U.S. trade negotiator said that finalizing a trade deal with South Korea was "within reach" but gave no timeline as he sought greater access for U.S. automakers. President Barack Obama is expected to discuss the deal when he visits Seoul on an Asia trip starting next week.[2]
South Korea is keen to avoid reopening talks on the trade deal, which triggered major protests that highlighted fears over the safety of U.S. beef.[2]
At the time the deal was signed in August, South Korea's Ministry of Foreign Affairs and Trade said India had completed all necessary procedures for the agreement to take effect once South Korea approved it.[4] The agreement signed in August by the two countries' trade ministers will eliminate or reduce import duties on 85 per cent of South Korean exports and 90 per cent of India's overseas sales by 2019, according to Seoul officials.[9]
U.S. Chamber and Korea Business Council Call for a Renewed Focus on U.S.-Korea FTA Thursday, November 05, 2009 - Article #2723 WASHINGTON, DC -- The U.S. Chamber of Commerce and the U.S.-Korea Business Council have called on the administration to take action on the pending U.S.-Korea Free Trade Agreement (KORUS) in order to boost exports and create jobs in America. "As the economy struggles to rebound, this agreement is an immediate job-creating stimulus,' said Myron Brilliant senior vice president of International Affairs for the U.S. Chamber and the outgoing U.S.-Korea Business Council president.[6] Obama as a senator opposed the draft accord sealed in 2007 and ordered a review after entering the White House. Speaking before the US-Korea Business Council, U.S. Trade Representative Ron Kirk said he remained concerned that U.S. automakers have a minuscule presence in Asia's fourth largest economy.[2] WASHINGTON (Dow Jones)--The Obama administration recognizes the potential economic benefits of the U.S.-Korea free-trade agreement, but wants to ensure that concerns over American autos and beef are addressed before moving forward with the pact, U.S. Trade Representative Ron Kirk said Thursday.[10]
The deal between Asia's third and fourth largest economies is known as a Comprehensive Economic Partnership Agreement, similar to a free trade agreement but phasing out tariffs more slowly. It also covers services and investments.[9] Trade Minister Kim Jong-hoon and his EU counterpart Catherine Ashton initialed the agreement last month with the aim of officially signing the deal in the first quarter of next year.[8] The Seoul Trade Ministry official said changes could mean full enforcement of the FTA deal under the "provisional application" of an FTA that is possible for the EU before official ratification.[8] "For the Korea-EU FTA, the Lisbon Treaty would improve efficiency of the whole ratification process and even accelerate the pace of enforcement," the Seoul trade official said in a telephone interview.[8]
The Lisbon Treaty, also known as the Reform Treaty, is an international agreement signed in Lisbon on Dec. 13, 2007 with the objective of overhauling the European Union's operational system. [8] Immediate tariff removal would make up 76.7 percent for the European Union and 69.4 percent for Asia's fourth-largest economy.[8] South Korea imposes an eight percent tariff on U.S. auto imports. The draft deal would phase it out but U.S. automakers and auto unions have been pushing for greater openness at a troubled time for Detroit's Big Three.[2] The South Korea-India deal will eliminate tariffs on three quarters of India's imports from South Korea by value, and more than 80 percent of South Korea's imports from India.[3]
The two countries will abolish or cut tariffs for 90 percent of Indian goods in terms of value and 85 percent of South Korean products, according to South Korea.[4] Tariffs on South Korean auto parts, the country's biggest export to India, will fall to as little as one per cent over eight years from the current average of 12.5 per cent. Both sides agreed to exclude fisheries and some agricultural products from the concessions. - AFP.[9] South Korea's main exports to India are auto parts, petroleum products, and mobile phones. Its largest import from India is naphtha, accounting for more than half of imports in 2008.[3]
Two-way trade between India and South Korea was worth US$15.6 billion (S$21.74 billion) last year. The pact is expected to raise this by up to US$3.3 billion annually, according to the Korea Institute for International Economic Policy.[9] A study by the state-run Korea Institute for International Economic Policy said the pact could boost annual two-way trade by $3.3 billion in the near term and raise South Korea's GDP by 1.3 trillion won ($1.06 billion).[3]
Trade between India and South Korea - Asia's third- and fourth-largest economies, respectively - has grown steadily and reached $15.6 billion last year.[4]
Bilateral trade between Korea and the EU reached $98.4 billion in 2008.[8]
The pact with the EU is expected to be approved by South Korea's parliament much quicker than the U.S. deal, which has also been unpopular with some Democrats in the U.S. Congress.[3] South Korea has repeatedly refused to renegotiate the auto provisions of the agreement.[1]
"We are not standing still," Kirk said in a speech to the U.S.-Korea Business Council. "However, we need to be mindful that important stakeholders have real concerns with this agreement," Kirk said in text prepared for delivery.[10] The U.S.-Korea Business Council is the leading business organization promoting the bilateral relationship between the United States and Korea.[6]
The Council serves as secretariat of the U.S.-Korea FTA Business Coalition, a group of over 800 U.S. businesses and associations that is working to secure Congressional approval of the U.S.-Korea FTA.[6]
An FTA would give Korea priority access to the world's largest economic zone, while the EU bloc would gain a strong foothold in the rapidly growing Asian region. [8] Currently, the "provisional application" is just like the actual accord taking effect but with some exceptions, since the pact is enforced without the approval of all 27 members. Trade experts said the EU had such a preliminary enforcement step in place because of the complicated and unpredictable length it could take for trade pacts to be approved by each of the 27 members.[8] The trade pact, which does not require ratification by India, could nearly double the volume of trade between the two sides, India's trade minister has said.[3]
Democrats are concerned that giving the deal a final nod would draw a backlash from trade unions -- a political power base for the party -- as fears mount over job losses amid the country's worst recession in decades.[7] The two countries signed the deal, known officially as a Comprehensive Economic Partnership Agreement, in August in Seoul.[4] The provisional enforcement only requires ratification by Korea, following the official signing of the deal.[8]
All tariffs in the industrial products sector would be removed within seven years, with a small remaining portion concerning the sensitive agriculture and fisheries sector for Korea extending up to 15 years.[8]
"America's market is completely open to Korean autos and all we're asking is for the same for America's automotive industry -- to be able to compete on a level playing field in the Korean market," Kirk said. "We believe, though, that that level playing field is possible and that it's within reach," he said, adding that the Obama administration was "working diligently" on proposals to present to Seoul. [2]
SOURCES
1. USTR Kirk says Korean trade pact needs new auto deal | Industries | Consumer Products & Retail | Reuters
2. AFP: US says SKorea trade deal 'within reach'
3. South Korea approves free trade deal with India | Top News | Reuters
4. South Korea OKs India free trade agreement | The Jakarta Post
5. YONHAP NEWS
6. U.S. Chamber and Korea Business Council Call for a Renewed Focus on U.S.-Korea FTA - Manufacturing & Technology eJournal
7. YONHAP NEWS
8. The Korea Herald : The Nation's No.1 English Newspaper
9. SKorea ratifies FTA with India
10. USTR Kirk: US Isn't Standing Still On Korea Trade Agreement - WSJ.com
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