Political leadership needed to iron out differences in FTA
Korea Times
Political Leadership Needed to Iron Out Differences in FTA
By Choe Won-gi
13 September 2006
The third round of Korea-U.S. free trade agreement (FTA) talks in Seattle ended Sunday without producing any practical progress on core issues. While the negotiation result is disappointing, it is not totally unexpected, given the inhospitable conditions of the negotiations.
Only a strong political leadership in both countries will help steer the trade talks to a workable direction in the future rounds of negotiation.
An FTA with the United States, along with the adjustment of the security alliance, represents a fundamental shift in the bilateral relationship that will eventually define the future of the two countries’ economic and security ties in the 21st century.
The Korea-U.S. security alliance, which has been the backbone of Korea’s military defense system for the last 50 years, is now being transformed as the wartime operational control of Korean forces is put on the negotiation table for a possible transfer to the Korean side.
The bilateral economic relationship is also in transition as Seoul and Washington negotiate a new type of economic partnership through a free trade pact that will elevate the bilateral economic cooperation to a new horizon.
Seoul expects an FTA with the United States to boost its exports and to help it get ahead of other competitors in the U.S. markets. It also sees the deal as a rare opportunity to reinforce much needed economic reform and upgrade some domestic economic sectors’ international competitiveness.
However, the road to a free trade pact with the United States has been bumpy since its beginning about seven months ago. It faces a number of daunting challenges from both inside and outside the nation.
Korean negotiators have had to deal with strong resistance and protests from the domestic anti-FTA coalition as well as the obstinate American negotiators, who have shown little flexibility in narrowing the fundamental differences on key negotiation issues.
For this reason, the conclusion of the Seattle trade talks with little progress on hand is not so terribly surprising.
At this critical moment, President Roh Moo-hyun’s visit to the United States for his sixth summit meeting with U.S. President George W. Bush on Thursday could provide an invaluable political opportunity to help smooth the negotiation process.
The two leaders should take this opportunity to demonstrate a vision of how a free trade pact would help strengthen strategic ties and develop a more comprehensive partnership that is not only anchored in a maturing security alliance, but also in deepening economic interdependence.
In fact, one of the main reasons that people fear a trade pact with the United States and even resist is a widespread sense of uncertainty.
Even members of the governing Uri Party may not seem sure of the prospects of the proposed trade pact. For example, several days ago some legislators from the party openly took sided with the anti-FTA coalition, contending that the president’s pursuit of an FTA with the United States is unconstitutional.
Twenty-three legislators, of which 13 are Uri Party members, filed a lawsuit at the Constitutional Court, arguing that the administration’s refusal to share information about the ongoing negotiations with the legislators has breached National Assembly’s constitutional right to ratify international treaties.
A clear and persuasive strategic vision of the bilateral FTA would have prevented such a self-harming political stunt and helped clear unfounded uncertainties and anxieties.
Both Roh and Bush should also demonstrate their commitment to work hard and cooperate for a successful conclusion to the negotiations even if the negotiations so far have not made any substantial progress.
As the failure of the Seattle trade talks last week showed all the more clearly, the differences in the two countries’ negotiating positions, regarding the desired extent of trade liberalization, still remain.
While Washington wants a complete, eventual elimination of trade barriers on agricultural products, Seoul demands a gradual liberalization with a number of sensitive agricultural products excluded from the concession list.
Washington has called for a revision of Korea’s domestic regulations on pharmaceuticals and automobiles, contending that they pose significant non-trade barriers to American products. Seoul views them as a part of a domestic regulatory system that has nothing to do with trade. It says they are thereby not subject to modification by a trade pact.
Both sides clash over issues of trade remedies and unfair trade practices, as well. Seoul considers some U.S. trade practices to be unfair to Korean exporters and often arbitrarily applied to protect domestic industries. It calls for a reform of the U.S. trade remedies regime, while Washington argues its regime is off-limits to a trade negotiation.
In order to find a way out of this stalemate, both leaders should demonstrate that they are willing to find ways to ease their respective negotiators out of both the constraints of domestic protectionist impulses and pressures from the narrowly defined interests of certain sectors.
It would be hard to strike a balance of interests without strong political leadership that would help work out differences in the trade negotiations and allow negotiators to engage in give-and-take exchanges.
In this respect, the summit meeting between the two leaders should provide an important political catalyst for the upcoming rounds of negotiations.
Choe Won-gi is an assistant professor at the Institute of Foreign Affairs and National Security in Seoul.
