Industry groups praise U.S.-South Korea free trade deal
Shortly after the successful conclusion of the U.S.-South Korea free trade agreement was announced early Monday, U.S. industry groups immediately began directing praise at the Bush administration.
“We’re pleased that the administration and the Korean government came to an accommodation that they believe will be acceptable to their domestic industries,” said Thomas J. Donohue, president and chief executive officer for the U.S. Chamber of Commerce. “We look forward to reviewing the details of this agreement, but are hopeful we can lend it our enthusiastic support.”
“This agreement with the world’s 10th-largest economy has the potential to bring huge economic benefits to U.S. business, workers, consumers and farmers,” added Peter M. Robinson, president of the U.S. Council for International Business. “It is one of the most important free trade pacts the U.S. has ever achieved.”
The Office of the U.S. Trade Representative said the trade deal would create new export opportunities for U.S. farmers by either eliminating or phasing out tariffs and quotas on a broad range of products. More than $1 billion worth in U.S. agricultural exports would immediately become duty free once the trade deal takes effect. Most remaining tariffs and quotas would be phased out over the first 10 years that the agreement is in force.
About 95 percent of bilateral trade in consumer and industrial goods becomes duty-free within three years of the agreement entering into force, with the remaining tariffs to be eliminated within 10 years.
The trade deal would eliminate discrimination in engine “displacement-based taxes,” long considered a significant impediment to U.S. automakers in Korea. The USTR pointed out that the agreement contains commitments to address specific standards-related concerns raised by U.S. automakers and creates a working group to review future auto-related regulations in South Korea. The agreement also sets up enhanced dispute settlement procedures for automakers to help maintain consistency with the agreement.
“With the inclusion of the ‘yarn forward’ rule of origin, the KORUS FTA will give apparel products from Korea preferential access to the U.S. market while supporting U.S. fabric and yarn exports and jobs,” the USTR said. “Textile and apparel makers in both countries will benefit from a special textile safeguard and strong customs enforcement requirements.”
The trade agreement also contains enhanced investor protections, improved service sector market access, intellectual property rights protections, labor rights and environmental protections.
The Bush administration moved quickly in recent weeks to conclude the U.S.-South Korea free trade agreement. By law, President Bush must notify Congress that he’s signed a free trade agreement 90 days before his special Trade Promotion Authority status expires on July 1. The president’s letter was released to Congress at about midnight on Monday, according to the Associated Press.
Under the Trade Promotion Authority, Congress may either vote to approve or oppose a free trade agreement negotiated by the White House, but not modify it.
According to the Washington Post, some lawmakers could challenge the trade deal on specific aspects. For instance, Sen. Max Baucus, D-Mont., chairman of the powerful Senate Finance Committee, has insisted that South Korea fully remove trade barriers to U.S. beef. The Bush administration is confident that South Korea is prepared to reopen its market to U.S. beef shipments by May, the newspaper reported.