Gaesong Inclusion like “Handing Out Cash to the North”
15 June 2007
On April 2, the first U.S. congressional hearing after the Korea-U.S. Free Trade Agreement was concluded and was a complaint-filled affair.
However, as only seven of the 15 members of the House Subcommittee on Terrorism, Non-proliferation and Trade attended the hearing, it would be premature to conclude that the hearing was largely about anti-FTA, since just 435 of the total congressmen were present.
On behalf of the administration, Deputy US Trade Representative Karan K. Bhatia was present at the hearing.
South Korea Trading With Iran-
Ron J. Klein (D. Florida), the Middle East expert in the Democratic Party, pointed out that South Korea signed several contracts with Iran to supply oil tankers. This marks the first time that the issue has been touched upon by U.S. Congress.
Mr. Klein said, “The KORUS FTA conflicts with Congress resolution No.1400 that disallows an FTA with any country that trades with Iran. The U.S. should not allow South Korea to undermine its priorities.” The resolution is not mandatory.
He said that a Korean company invested $1.6 billion in oil field development in Iran and signed a contract to deliver to Iran several oil tankers in 2008 and 2009.
Immediately after the hearing, Brad J. Sherman (D. California), committee chairman, said, “For South Korea, the Iranian nuclear development may not be threatening, but for the U.S., the nuclear issues of North Korea and Iran are equally serious non-proliferation problems.”
Mounting Criticism on Automotive Deals-
As expected, the automotive deals between South Korea and the U.S., which immediately eliminated 2.5 percent of tariffs on Korean cars of 3000cc or less, was a burning issue.
David W. Scott (D. Georgia) said, “The KORUS FTA is a bad deal for the U.S. and is one-sided,” mentioning the closures of GM and Ford auto manufacturing factories in his district. In Georgia, Kia Motors, a Korean automaker, is building its manufacturing plant.
Donald A. Manzullo (R. Illinois), though he is a Republican Party member and an advocate of free trade, urged renegotiation, saying “The U.S. responded properly on the tariff issues but not on the nonsense of South Korean non-tariff barriers.” Chrysler manufacturing plants are located in his district.
Democrats Taking the Lead over the Gaesong issue -
Before the FTA conclusion, Republicans were vehemently against the idea to include the Gaesong Industrial Complex issue in the deal. Now, the Democrats are taking the lead.
Committee Chairman Sherman said, “It is unacceptable given our serious efforts to prevent North Korea’s nuclear development.”
“If goods produced in the Gaesong complex are recognized as the products of South Korea, it will be no different to handing out cash to the North. This is unacceptable,” Scott added.
At the hearing, Edward R. Royce (R. California) was the only advocate of the FTA. “South Korea had to lower its tariffs more than the U.S. The KORUS-FTA will benefit the U.S.,” he said.