Korea, U.S. sign landmark trade accord
Korea, U.S. sign landmark trade accord
Korea and the Unites States signed their historic free trade agreement on Saturday, capping off an arduous process of negotiations that began in June 2006.
Korea's trade minister, Kim Hyun-chong, and U.S. Trade Representative Susan Schwab, signed the agreement with over 200 government officials and business leaders attending the formal ceremony in Washington D.C.
"I think that the turnout this morning is a testament to the historic importance of this FTA - not only as a milestone in the bilateral relationship between the United States and Korea, but also as a symbol of the future of global trade," Schwab said during her speech at the ceremony.
The FTA with the United States would be the biggest trade accord ever for Korea. For the United States, it would be the largest since the North American Free Trade Agreement took effect in 1994.
Kim Hyun-chong, Korea's trade minister, also stressed the importance of the historical moment at the ceremony.
"Being able to sign the Korea-U.S. FTA after about 15 months of effort is not only a great honor but also an exclusive right," the minister said. "Korea and the United States are economic partners that can now face the challenges of the 21st century together."
The policymaker declared that the trade accord is an opportunity to accelerate national competitiveness.
Experts predict that two-way trade could increase by up to $20 billion in the next few years. The pact eliminates about 95 percent of tariffs on commodities in the three years after it goes into effect.
Schwab highlighted the accomplishments in her speech. She said the deal has expanded the markets for the ranchers and farmers of both countries, further opened each country's services markets, as well as strengthened intellectual property rights, labor protection, and environmental standards. She added that both sides have "broken new ground in such areas as competition, regulatory policy, and transparency."
Korea is Washington's seventh-largest trading partner, while the United States is Korea's second-largest export market, after China. Two-way trade totaled $72 billion in 2005, with Korea recording a $16 billion surplus.
Despite the expected benefits stated by the Roh and Bush administrations, anti-FTA groups continue to protest, arguing that market liberalization only threatens to destroy the livelihoods of domestic industries by weakening the competitiveness of local goods.
Both sides now face the biggest challenge of getting the accord approved by each others' legislatures.
The U.S. House speaker and other leading Democrats on Friday stated their opposition to the free trade agreement (FTA) with Korea, criticizing the deal for failing to address trade barriers, particularly in the auto sector. They described it as a "one-sided trading relationship."
The joint statement was issued by House Speaker Nancy Pelosi, Majority Leader Steny Hoyer, House Ways and Means Committee Chairman Charles Rangel, and Ways and Means Trade Subcommittee Chairman Sander Levin.
"Properly negotiated, a South Korea-U.S. FTA would provide key benefits to American workers, farmers, and businesses," it stated. "Unfortunately, the (FTA) as currently negotiated is a missed opportunity."
The agreement fails to effectively address "persistent problems" with non-tariff barriers that block access for American manufactured products to South Korea, the statement said.
"That is particularly the case in the automotive sector, where last year South Korea exported more than 700,000 cars into the U.S., while the United States exported fewer than 5,000."
After taking control of Congress this year, the Democrats have been pushing for stronger regulations in areas such as labor and the environment in pending free trade deals.
This prompted Korea and the United States to hold additional talks up until a few days before the June 30 deadline to sign the deal, which was supposedly sealed in April.
The Democrats also opposed the FTA with Colombia, but indicated the possible approval of similar deals with Peru and Panama later this year.
Schwab, however, expressed optimism and confidence in the successful ratification of the trade pact.
"We have a lot of work ahead of us to educate lawmakers," she said. "I use the word educate rather than convince because I firmly believe that as members of both our legislatures come to appreciate the enormous benefits of the agreement - and once the myths our critics have already started to spread are dismantled - the KORUS FTA will attract broad support."
The Korea-U.S. FTA is the last trade pact to be signed under the June 30 deadline of the Bush administration's Trade Promotion Authority. The TPA gives the White House the right to expedite trade deals so Congress must approve or reject the deal without amendments.
The Roh Moo-hyun government believes the free trade accord with the world's largest economy is important in advancing Korea's economy, helping the country meet global standards, and strengthening the nation's competitiveness by encouraging more innovative development.
For the world's largest superpower, freer trade with Asia's third-largest economy is also important and timely.
"The United States must not be on the sidelines as Korea and other countries in Asia and other parts of the world deepen and strengthen their trade ties," Schwab said.
"America's economic future depends heavily on more free trade agreements like the one we are about to sign with Korea."
<< The Korea Herald, July 02, 2007 >>
