US pledges to revise South Korea free trade agreement
Financial Times | June 28 2010
US pledges to revise South Korea free trade agreement
By Alan Beattie in Toronto
The US said at the weekend it will seek to complete a long-stalled trade deal with South Korea, while the Group of Eight countries acknowledged deep troubles in global trade talks by shifting the focus to bilateral pacts.
The White House said the revised pact would be agreed before the next G20 meeting, in South Korea in November, and submitted to Congress in the following months. The drive to revise and ratify the Korea "free trade agreement" has faced determined opposition in Seoul and within Barack Obama’s Democratic party in Congress.
The US insisted the move would not involve renegotiating the draft agreement, which was finalised in 2007 during the administration of George W. Bush. The pact has languished amid complaints from US beef and vehicle producers that they are kept out of the Korean market, and a suspicion of trade deals among congressional Democrats.
But officials could not say how they would resolve the outstanding issues without reopening the pact. Renegotiation would be strongly opposed in South Korea and could jeopardise the White House’s ability to push the deal through Congress using so-called "trade promotion authority".
Sander Levin, chairman of the House of Representatives ways and means committee and congressman from the carmaking state of Michigan, gave the announcement a highly qualified welcome. "Congress expects to be consulted actively in these negotiations, and the date targeted by Mr Obama can be met only if the outstanding issues are fully addressed with enforceable commitments," he said.
Meanwhile, the final communiqué from the weekend’s G8 meeting dropped a promise to finish the so-called Doha round of global trade talks this year, and for the first time backed bilateral trade and regional pacts. "We will continue . . . to promote liberalisation of trade and investment under the WTO, through the national reduction of barriers, and through bilateral and regional negotiations," it said.
Bilateral and regional deals have risen exponentially in recent years as disillusionment has risen with the nine-year-old Doha round. The European Union two years ago reversed course and began negotiating bilateral deals.
But many economists say they do more to complicate and divert trade than to liberalise it. The G8 statement will reduce yet further confidence that the Doha round, in limbo since 2008, will ever be completed.
An EU official said the bilateral reference was an acknowledgement of reality. "You only have to look around you to see negotiations going on all over."
Additional reporting by Chris Giles in Toronto
