“Beef and automobile issues could derail Korea-US FTA”
Donga (Seoul) | 18 September 2007
“Beef and Automobile Issues Could Derail Korea-U.S. FTA”
“I haven’t had a bad day since,” is a frequently spoken quote of U.S. Congressman Charles B. Rangel (D-NY), the chair of the U.S. House Ways and Means committee, but it is also the title of his memoir published in April. The “day” he is referring to was November 3, 1950 when he faced near-certain death in combat against China’s People’s Liberation Army during the opening stages of the Korean War.
Rangel is an American pro-Korean lawmaker. In an interview with this newspaper, he expressed his affection for Korea by saying continuously, “Thank you” in Korean. But when it came to issues related to the Korea-U.S. FTA, his tone was different: very dry and businesslike.
Since the conclusion of the FTA, media outlets and trade officials of both Korea and the U.S. have been closely watching what Rangel has to say, as he holds the key to the ratification of the trade pact. However, he has been reticent. But he spoke his mind yesterday, and it was very persistent and negative. People thought he would be more supportive of the Korea-U.S. FTA.
Q. Do you support the Korea-U.S. FTA?
A. The trade deal needs to be ratified by the congresses of Korea and the U.S. alike. The agreement signed on June 30 contains both positive and negative content. In terms of finance and insurance industries, it will be beneficial to the U.S., but there are areas that offset this plus side, namely beef imports and the automobile sector. People in beef exporting states don’t believe that fair trade will take place through the Korea-U.S. FTA, which is why the lawmakers of these states aren’t backing the trade deal. The same is true for the automobile sector. Korea has always been very protective of its automobile industry and everyone knows this. There are problems in the U.S. automobile industry of course, but the reality is that while 700,000 Korean cars are sold in America every year, the number of American cars sold in Korea is less than 5,000. Related lawmakers will not approve of the Korea-U.S. FTA. That means the trade pact will not gather enough votes for ratification. The U.S. administration cannot even ask Congress to pass the agreement. The detailed contents of the agreement for ratification are being worked out as we speak.
Q. Can the automobile sector undermine the Korea-U.S. FTA?
A. Along with the beef issue, this can be a deal breaker.
Q. The Korean government reaffirmed that there will be no renegotiation. What do you think the Korean government should do to address this issue?
A. I can’t say in detail what should be done. One thing is certain, that the Korean government should convince the U.S. Congress that bilateral trade will be carried out in a fair manner. More U.S. beef and cars should be allowed to enter the Korean market and to compete under the same conditions as Korean cars. It should make sure that the U.S. is not shortchanged. The same is true for Korea, too. Not everyone is for the FTA between Korea and the U.S. Not just negotiators of both side, but also the people of both countries need to be able to say “yes” to the trade pact.
Q. Negotiators from Korea and the U.S. modified part of the agreement at the end of June when they renegotiated terms of the FTA under the “New Trade Policy” guidelines, which you played a key role in drafting. There are four FTAs to be ratified for the U.S., which involve Peru, Panama, Columbia and Korea. When do you expect the one with Korea to be considered?
A. I’m sure an FTA with Peru will be ratified by month’s end. The FTA with Panama will be ratified for certain; however, we need to follow Panama’s situation closely because it involves the appointment of a congressional speaker after a murder case involving U.S. military personnel that is causing controversy took place in the area. In Columbia, the situation is even more complex, but a visit by U.S. congressmen will hopefully remove barriers to ratification. For the Korea-U.S. FTA, we are still engaging in dialogue with the Korean government. We are hoping that the negotiations that are underway will send positive signals in favor of the ratification. To this end, we’re trying to improve the agreement in place.
A high-ranking Korean government official said on September 15, “The U.S. Congress is pressing the Bush administration to engage in further dialogue with us regarding the automobile industry, but there will be no additional negotiations on this issue.”
Q. The U.S. presidential primary begins next February, and there is a concern the Korea-U.S. FTA ratification issue will be passed down to the next administration. When do you think is the best time for the U.S. administration to submit the ratification agreement?
A. The administration should not bring the ratification agreement to the Congress until they have secured enough votes. No political timeline can change this. If the administration is certain that the ratification will fail, it won’t bring it to the Congress. They know they need to resolve beef and automobile issues before they can bring the ratification bill to us. If people are for clauses related to beef import and automobiles, that’ll be the best time to bring the Korea-U.S. FTA to the Congress.
