US government told Korea FTA to aid financial services access, telecoms, exports
AFX News Limited
US government told Korea FTA to aid financial services access, telecoms, exports
20 June 2007
WASHINGTON (Thomson Financial) - A panel of government trade experts was told in Washington today that approval of the US-Korea free trade agreement (FTA) would lead to new overseas demand for a wide range of US goods and services, in particular financial services.
Laura Lane, co-chair of the US-Korea Free Trade Agreement Business Coalition and senior vice president for Citigroup (nyse: C - news - people ), said the agreement would dramatically lower US access barriers in the banking, insurance, securities and investment sectors. She said Korea has agreed under the deal to drop regulatory procedures that are the equivalent of placing a high tariff against US service providers.
Lane added that under the agreement, US companies will be able to fully own financial institutions in Korea, including branch banks, insurance companies, and asset managers.
’The US-Korea FTA includes possibly the strongest ever chapter for financial services in a US FTA,’ she told the US International Trade Commission today.
She also said the agreement would allow US telecom providers to take 100 pct ownership stakes in telecom companies in Korea, an improvement from the restrictions Korea currently has in place.
Lane predicted that US goods exports would also prosper under the deal. ’We expect this to have beneficial effects for US companies exporting goods including machinery and electrical machinery, auto and aircraft parts, chemicals, and others,’ she said.
US and Korean officials are expected to sign the FTA on June 30, but the accord cannot take effect until implementing legislation is approved by Congress.
Congressional passage could be tricky, as the Bush administration and congressional Democrats still need to agree on how to improve the Korea agreement in areas such as labor and environmental protection.
Failure to reach an agreement in this areas is already calling into question the ability to approve trade deals with Panama and Peru.
