The Hankyoreh, Seoul
Hearing reveals opposing views on Korea-US FTA
21 June 2007
Washington, Yonhap News - A senior U.S. congressman demanded a full re-negotiation of a proposed South Korea-U.S. free trade agreement (FTA) Wednesday, charging that the deal as it stands consents to one-way trade in Seoul's favor.
Speaking at the U.S. International Trade Commission (ITC) hearing, Rep. Sander Levin (D-Michigan) based most of his criticisms on the agreements in the auto sector, which symbolizes his home state.
The FTA as negotiated "will simply lock in a structure of one-way trade between the two industrialized nations," he said.
"It is the wholesale acceptance of this completely imbalanced and damaging trade model that the U.S. actually rewarded in this FTA that I find so damaging and dangerous," the congressman said.
Levin also bashed the deal for excluding rice and not obtaining South Korea's full resumption of American beef imports.
"As we seek to set a new course for U.S. trade policy, this FTA's complete acquiescence to one-way trade is unacceptable and does not merit the support of Congress," he said.
"It must be re-negotiated."
Just hours earlier, South Korea's envoy to Washington, Amb. Lee Tae-sik, said arguments like Levin's are part of widespread misperceptions held by the U.S. public.
"The Korean auto market is open to foreign automobiles," he said emphatically at the opening session of the hearing.
"Korea is not the main source of the U.S. auto trade deficit," Lee pointed out, and cited figures from the U.S. Commerce Department for 2006 that showed American automotive trade deficits of US$43.2 billion with Japan, $25.1 billion with Canada and $22.9 billion with the European Union.
With South Korea, the figure is $8.5 billion, he said.
"Allegations that the Korean government supports a campaign to discourage consumers from purchasing foreign automobiles are groundless," the envoy said.
He flatly rejected calls for numeric targets, calling them managed trade and "thus not permissible in the free trading system."
Such opposing views emerged throughout the ITC hearing, the first since the draft FTA text was made public.
Seoul and Washington reached a tentative agreement, called KORUS FTA for short, on April 1 after less than a year of negotiations, incorporating across-the-board tariff cuts and elimination as well as wider market access. The presidents need to sign the final FTA by June 30, after which respective legislatures must ratify the agreement to put it into effect.
The hearing started off smoothly, with the first panel composed mostly of industry leaders who support the FTA.
Laura Lane, co-chair of the U.S.-Korea FTA Business Coalition, said her group "vigorously supports" the proposed trade pact.
"As with other recent U.S. FTAs, coalition members expect the U.S.-Korea FTA will lead to significant increases in trade volume," she told the ITC.
Brad Smith, speaking for the American Council of Life Insurers, said the FTA contains commitments that will help ensure that "Korea continues steadfastly on its path of reform, further liberalizes its financial services sector and adopts international best practices."
The mood changed when Stephen Biegun, vice president of Ford Motor Co., testified in the second panel.
"Nothing in Korea's approach to this negotiation... suggests to the automobile industry that the Korean government has the slightest intention to open their market," he said.
"We do not support this agreement in its current form precisely because we do support free trade, and this is not free trade."
The United Automobile, Aerospace and Agricultural Implement Workers of America also criticized the trade deal.
"The proposed KORUS FTA contains no guarantees or mechanisms for the U.S. to gain substantially greater access to the Korea auto market, and allows Korea to continue the discriminatory taxes and other non-tariff barriers that it has used to keep its market closed," Douglas Meyer, deputy director of the union, told the hearing.
Jay Truitt, vice president of the National Cattlemen's Beef Association (NCBA), welcomed the FTA that would reduce South Korea's beef import tariff to 0 percent over a 15-year period.
This makes the KORUS FTA "one of historic importance and value to U.S. competitiveness in the Korean beef market," he said.
But South Korea has yet to fully lift the import ban, he complained.
Seoul closed its doors to U.S. beef in 2003 after the discovery of a mad cow disease case at an American cattle farm. In January 2006, it agreed to import only boneless products from cattle less than 30 months old.
U.S. pressure mounted after the World Organization for Animal Health (OIE) ruled last month that American meat is safe enough to export.
"America's cattle producers deserve fully restored access to the South Korean marketplace," said Truitt.
"As soon as we see U.S. beef trade based upon OIE guidelines occurring between the United States and Korea, NCBA will support the U.S.-South Korea FTA and the market access terms negotiated in this agreement," he said.
"If that does not occur, NCBA and our cattle producer members will oppose this FTA."
