Korea Times, Seoul
Early FTA Ratification Urged
By Kim Tong-hyung, Staff Reporter
31 October 2008
President Lee Myung-bak called for a quick approval of the free trade agreement (FTA) signed between South Korea and the United States in a meeting with business leaders from both countries in Seoul Friday.
Lee also promised further efforts to improve the country's business environment for potential investors and hinted on stronger measures to curb labor militancy.
``Regardless of whether the FTA deal is ratified by legislators in the U.S., the government and the Grand National Party (GNP) is working hard to have the deal approved by the National Assembly before the end of the year,'' Lee told the particpants at this year's Korea-US Business Council held at the Shilla Hotel in Seoul.
Lee also claimed that the country's labor-management relations will become a lesser problem for foreign investors and promised strict control of ``illegal'' labor actions.
``We are going through tough times, but we will be looking to constantly to improve the business environment for foreign investors,'' Lee said.
``On illegal labor actions, the government will be quicker than the companies themselves to react,'' he said.
The meeting, now in its 21st year, was joined by 100 high-profile businessmen and policymakers from Korea and the U.S., including Hyosung Group Chairman Cho Suk-rae, Citi Chairman and Chief Executive William Rhodes, Gale International chairman Stanley Gale and GM Asia Pacific president Nick Reilly.
In a joint statement announced after the meeting, the participants declared their support for the FTA deal and also called for collaborative efforts between both sides to tackle the challenges caused by the global financial crisis, and praised the $30 billion currency swap deal between the Korean central bank and the Federal Reserve.
After year-long negotiations, the two countries reached the agreement in April last year and the free trade pact is now subject to approval by the lawmakers of both countries.
However, political situations, including the upcoming U.S. presidential elections, have emerged to blur the prospects for ratification.
Democratic presidential candidate Barack Obama has been constantly expressing his opposition to the pending trade deal with Korea, claiming an imbalance in auto trade.
The FTA ratification accounted for a wealth of the discussions at the meeting and there were also talks about founding more opportunities for mutual investment and industrial cooperation and strengthening the protection of intellectual property.
Knowledge and Economy Minister Lee Youn-ho urged for a quick ratification, stressing that the deal would especially benefit American carmakers.
Democratic presidential candidate Barack Obama has been constantly expressing his opposition to the pending trade deal with Korea, claiming an imbalance in auto trade.
``The FTA will eliminate tariffs and other non-tariff trade barriers and will offer major opportunities for American carmakers,'' said Lee, adding that the local sales of imported cars last year more than doubled from the level in 2004.
Lee also stressed that labor-management relations are becoming less of a problem in Korea, saying that labor unions are ``understanding'' the importance of luring more foreign investors.
One of the more debatable comments came from Jun Kwang-woo, the chairman of Korea's Financial Services Commission, who said that the government will continue to push for the deregulation of the financial sector despite the current uncertainties in the market.
The Lee administration has been seeking to loosen financial regulations, which includes plans to privatize state-run banks, easing bank ownership restrictions for non-financial companies and allowing banks larger freedom to engage in the investment business.
However, critics are questioning the logic of retaining the deregulation plans at a time when other economies, including the U.S., are tightening their control on financial firms in the fallout of the Wall Street meltdown.
``Reducing regulations would be critical in improving the competitiveness of the financial market and there will be constant efforts to lower the entry barrier and remove the obstacles that have been slowing the competition,'' said Jun, who added that the government is confident about the financial health of local banks.
``The capital market integration act is part of the plans and the privatization of state-run banks will be also pushed as planned. The current environment is challenging, but the Korean economy stands on a solid foundation,'' he said.
