19 April 2008
US-SKorea free trade pact still in limbo after beef deal
WASHINGTON (AFP) - The United States and South Korea may have ended a longstanding row over beef but the headway seems insufficient to convince the Democratic-controlled Congress to ratify a free trade agreement between the two allies.
Hours after Seoul announced its decision Friday lifting a ban on American beef imports, senior Democratic lawmakers trained their guns at South Korea's lucrative auto sector, saying it should be opened wider.
"A last-minute, unenforceable, untested agreement on beef is not enough to satisfy Congress," said Michigan House of Representatives lawmaker Sander Levin, who heads a powerful trade group of the House Ways and Means committee.
"The problem with this FTA has always been broader than beef -- it is the agreement's basic acquiescence to Korea's one-way street in manufacturing trade that is also unacceptable," he said, singling out autos.
House Speaker Nancy Pelosi, fresh from rejecting President George W. Bush's move to force legislature to vote on a free trade agreement with key South American ally Colombia, shared similar concerns on autos in the Korean deal.
"When the agreement was done, even the negotiators knew there was concern in Congress about beef and autos and they both need to be resolved satisfactorily before it is sent to Congress," Pelosi's spokesman Brendan Daly told AFP.
The US auto sector continues to shrink amid a slowing economy and as free trade becomes less and less popular ahead of presidential and Congressional elections in November.
Both Democrats in the presidential race, senators Barack Obama and Hillary Clinton, are against the US-South Korean deal, unhappy particularly with the auto provisions.
Under the trade agreement, the two countries would lift tariffs on autos and light trucks. Seoul also agreed to scale back measures that Washington charged are trade barriers, like a tax based on engine size.
But automakers charge that those measures fall short of ensuring entry for US-made autos into the South Korean market.
In 2006 for example, Korean manufacturers exported 700,000 vehicles to the US market while only 4,000 vehicles were exported from the United States to South Korea, Congressional aides said.
They also cite an 11-billion-dollar US deficit in automobile trade with South Korea in the same year -- 82 percent of the total US bilateral trade deficit.
The pessimism in Congress blunts renewed hopes of the Bush administration to have swift Congressional passage for the US-South Korea free trade deal -- the biggest trade agreement in 15 years.
But US Trade Representative Susan Schwab remained optimistic, describing news of the resumption of beef exports to South Korea as removal of "the major obstacle" to Congressional consideration of the FTA.
"The administration will now work in earnest with Congress and the US agriculture, manufacturing, and services sectors to pass the FTA," Schwab said, without elaborating.
South Korea banned import of US beef in 2003 due to mad cow fears. It eased the ban in 2006 but effectively halted all imports last October.
The ban-lifting decision was made as South Korean president Lee Myung-bak held talks with Bush in his Camp David retreat amid warming ties.
Despite the rejection of the Colombia deal, the Bush administration is determined to handle the FTAs it signed with foreign countries in the order they were inked.
It would continue to push for ratification of the Colombia deal before tackling the agreement with Panama and then the one with South Korea.
"We are still obviously hopeful that the House would move forward as soon as possible and the Speaker would call for a vote on the Colombian FTA and we will take the other ones from there," said Sean Spicer, spokesman for Schwab.
