KORUS FTA launch
Washington Times
KORUS FTA launch
By Alexander Vershbow/ Lee Tae-sik
18 June 2006
We opened a new chapter in the U.S.-Korea relationship last week with conclusion of the first round of negotiations for the Korea-U.S. (KORUS) Free Trade Agreement. Negotiators from both countries had an impressive start, working with great determination and mutual respect to conclude what we hope will be one of the most significant such agreements worldwide and one of the most important developments in U.S.-Korea relations since the signing of our Mutual Defense Treaty more than a half-century ago.
Last month, the two of us traveled together to six U.S. cities to discuss the U.S.-Korea relationship with local business and civil society leaders. We were overwhelmed by the high interest in the shared future of our two great nations and economies. Our two countries’ relationship is deeply rooted in shared core values of democracy, the rule of law, personal freedom and faith in the market economy. We also share a half-century of working together as close allies on every conceivable issue, from political and military matters to promoting our valuable economic relationship.
The U.S.-Korea alliance was forged in the tragedy of war, and was for many years centered on deterring external aggression. But we need to prepare for the fact that the future center of gravity of our relationship lies elsewhere.
Last year, our two nations exchanged about $72 billion of goods and services. Korea is the seventh-largest trading partner for the United States, and the U.S. is the third-largest for Korea. The United States is Korea’s largest foreign investor. Meanwhile, Korean investment in the United States is growing rapidly. About 2 million Koreans and Korean-Americans live in the United States, and another 700,000 visit each year, making Korea the fifth-largest source of foreign visitors to the United States.
Korea today is a modern and robust economy that makes a natural trading partner for the United States. Its economy ranks among the world’s top 10. Korea is at the cutting edge of the global information revolution, leading the world in such measures as broadband penetration, mobile phone subscriptions and Internet use. It thus represents a highly lucrative market for American high-tech goods and services, as well as for agricultural products. The United States, on the other hand, remains a key powerhouse of the global economy as well as the biggest market in the world.
Thus, both Korea and the United States are key markets for firms that want to compete on the global stage. By bringing the markets closer together, the KORUS FTA will be an important step forward on the path of modernizing the U.S.-Korea relationship and building stronger ties between our two countries.
Given the size and complexity of our bilateral economic relationship, the KORUS FTA negotiation will be quite challenging. But the benefits that will flow from the KORUS FTA will more than justify the effort. Economic research " Korean as well as U.S. " is clear and compelling: The KORUS FTA will greatly benefit the economies of both partners.
But there is talk in some quarters about the costs of free trade, or the costs of the KORUS FTA. But where is the talk about the heavy costs the status quo imposes on our economies" Protectionism burdens the people of the "protected" economy with great, often unseen costs, in terms of higher consumer prices and tax burdens. This can sap investment from competitive industries and lose markets to other foreign countries.
We recognize the concerns of vulnerable sectors in the paths toward trade liberalization. Those concerns will have to be taken into account through various measures which include trade adjustment assistance or longer implementation period. But we are confident our negotiators will produce a win-win situation, presenting a comprehensive and high-quality agreement that meets the needs of both sides.
It is our firm hope the decision to launch the KORUS FTA negotiations will put to rest allegations that U.S.-Korea relations are troubled, or that our alliance is drifting apart. If that were so, we would not be taking this step. By strengthening our bilateral ties, the United States and Korea will be even better positioned to make positive geopolitical contributions to the stability and prosperity of the Northeast Asia region.
We move onto the next round of negotiations, in Seoul next month, as indispensable allies, natural trading partners, and good friends. These FTA negotiations represent a vote of confidence in the enduring strength of these ties. We are very pleased we will be able to do our part to ensure the negotiations are successful and we are able to seize this historic opportunity.
Alexander Vershbow is U.S. ambassador to the Republic of Korea and Lee Tae-sik is the Republic of Korea’s ambassador to the United States.
