Outlook cloudy for SKorea-US free trade agreement
Associated Press | 27 December 2008
Outlook cloudy for SKorea-US free trade agreement
By KELLY OLSEN
SEOUL, South Korea (AP) — Call it the free trade follies.
South Korean opposition politicians last week used a sledgehammer to try and force their way into a barricaded committee room to stop the ruling party from introducing debate on a tariff-slashing free trade agreement with the United States.
Fire extinguishers were used amid the melee — it’s not entirely clear by whom — that threw South Korea’s National Assembly into chaos.
The brouhaha highlights the emotional intensity such pacts can trigger - as well as this one’s murky outlook.
The South Korea-U.S. Free Trade Agreement has languished in political limbo since being signed nearly 18 months ago.
It still needs approval from legislatures in both countries, but two major developments since then have raised questions about its passage: Major political changes in both South Korea and the United States and the global financial crisis.
Conservative South Korean President Lee Myung-bak, who took office in February, is a firm supporter of the deal, negotiated and signed by the previous liberal Roh Moo-hyun administration.
Lee’s Grand National Party wants South Korea to ratify the pact first — as early as by the end of this year — potentially making it harder for the incoming U.S. administration of President-elect Barack Obama, seen as taking a harder line on free trade, to call for a renegotiation of the free trade agreement.
Fears of such a scenario intensified during the final presidential debate in October, when Obama singled out South Korea by noting a wide imbalance in auto trade between the two nations.
"That is not free trade," he said in the debate. "We’ve got to have a president who is going to be advocating on behalf of American businesses and American workers and I make no apology for that."
South Korean automakers including Hyundai Motor Co. sold 772,482 vehicles in the United States in 2007, while Detroit sold 6,235 in South Korea, according to statistics compiled by South Korean auto industry groups.
Members of Roh’s former party, now in opposition under a new name, the Democratic Party, say they still favor the deal — but want to ensure measures are in place to help farmers and others seen as vulnerable to more U.S. imports. They warn against being too hasty in ratifying the agreement.
So on Dec. 18, when the ruling GNP introduced legislation to a National Assembly trade committee without the Democrats, the opposition politicians used a sledgehammer and other construction tools to tear open the committee room’s wooden doors, only to find GNP lawmakers had set up barricades of furniture inside.
The attempt to storm the room failed, and the GNP introduced the bill — a move the Democratic Party called illegal.
The GNP has a majority in both the committee and the entire National Assembly and could try to ram the legislation through. Given the opposition’s anger, however, and a slew of other, arguably more urgent bills pending approval, it is unclear when the full legislature will vote on the pact.
"That so much commotion was caused merely to put the issue of ratification onto the agenda for the committee, makes us wonder how much more disorder will ensue," the mass-circulation Chosun Ilbo newspaper said in an editorial.
The trade deal is significant for both the U.S. and South Korea. It is the largest for the U.S. since the North American Free Trade Agreement with Canada and Mexico and the biggest ever for South Korea. NAFTA, signed in 1993, took effect the following year.
Myron Brilliant, vice president for Asian affairs at the U.S. Chamber of Commerce in Washington, calls the agreement a potential catalyst for U.S. "economic expansion in East Asia."
Despite the upheaval in South Korean politics, the global economic crisis appears a bigger stumbling block for now and will affect ratification efforts differently in each country.
Cheong In-kyo, an expert on free trade at Inha University in Incheon, South Korea, says the drying up of demand for South Korean exports will likely increase support for the agreement at home.
Not so, though, in the United States, where skepticism about free trade increases in times of stress, he said.
"Next year the U.S. will experience one of the most severe economic recessions," Cheong said. "It’s not a good time."
Brilliant, who also serves as president of the U.S.-Korea Business Council, is optimistic Congress will eventually approve the agreement, despite hardline campaign rhetoric on trade by Obama and other Democrats.
Still, he says passage will take time, with the deal not likely even to be taken up for consideration until the summer or fall of next year at the earliest, and probably later.
Obama, who takes office Jan. 20, will initially have other, more pressing, priorities.
"The reality is that President-elect Obama will be focusing on getting our financial house in order," Brilliant said.
Associated Press Writer Shinwoo Kang contributed to this report.
