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Chamber’s leader says FTA will pass

JoongAng Ilbo, Korea

Chamber’s leader says FTA will pass

Clinton and key lawmaker insist on changes in deal’s automobile section

By Moon So-young Staff Reporter

16 January 2009

Thomas Donohue, the head of the U.S. Chamber of Commerce, said during his visit to Seoul yesterday there would be no “renegotiation” of the free trade agreement with Korea, while there could be some “adjustments” regarding the controversial auto issue.

His remarks came after U.S. Democratic Party leaders, including Secretary of State-designate Hillary Clinton, called for renegotiation of the FTA, auto trade, in particular.

“The FTA was signed,” Donohue told reporters after a luncheon meeting in southern Seoul yesterday with members of the American Chamber of Commerce in Korea and Korean business groups. “We are not going to formally reopen those negotiations.” But he added that adjustments, including engine standards, might need to be made.

American automakers have repeatedly complained that these are “non-tariff barriers” that add to the price of their cars in Korea. Donohue emphasized that such final adjustments frequently occur in trade deals and do not mean renegotiation.

Neither side has ratified the landmark deal yet. The deal has drawn opposition from the U.S. Congress and from Korean opposition lawmakers, who occupied the National Assembly for two weeks last month in part to prevent the ruling party from voting on the accord.

Earlier this week, Clinton said in written responses to questions from the Senate Foreign Relations Committee, “Because the FTA gives South Korean auto exports essentially untrammeled access to the U.S. market, ratification of the agreement in its present form would mean the United States would lose its remaining leverage to counteract.”

“If the South Koreans are willing to re-engage negotiations on these vital provisions of the agreement, we will work with them to get to resolution,” she added.

House of Representatives Ways and Means Committee Chairman Charles Rangel also called for renegotiation of the FTA on the auto issue Wednesday, according to Reuters. Complaining that the Bush administration did not do its best to change its auto provisions, he said, “If they fought as hard for cars as they did for beef, we wouldn’t have that problem.”

“There is little question that President-elect Obama will face strong protectionist pressure from the larger Democratic majorities in the House and Senate,” Donohue said in a speech during the luncheon. “Both nations must overcome political hurdles to get this deal done. It is the business community’s responsibility here and in Washington to lead the way forward.”

He said he is convinced the landmark agreement will be passed, “which will create jobs and will help overcome the global economic crisis.” Donohue also told reporters, “If we [the United States] started putting up free-trade agreements and then voting them down we would lose a lot of credibility in trying to open markets around the world ... It won’t happen.”