US trade committees give mixed reviews to proposed Korea-US FTA
Yonhap 2007/05/26
U.S. trade committees give mixed reviews to proposed Korea-U.S. FTA
WASHINGTON, May 25 (Yonhap) — American advisory committees gave divided and mixed evaluations of a proposed South Korea-U.S. free trade agreement (KORUS FTA), the opinions sometimes differing even within an industry.
Labor group representatives registered one of the strongest opposition to the FTA, saying the agreement "fails to meet the negotiating objectives laid out by Congress."
The division was clear in the auto sector, in which Ford Motor expressed disappointment but General Motors, while neutral, concluded the FTA addresses U.S. car industry’s main concerns.
The textile and clothing committee said its members could not make a unified statement either in support or opposition and thus withheld announcing a consensus.
Individual reports of 26 advisory committees, providing recommendations to the White House, U.S. Trade Representative and the Congress, were made public with the release of KORUS FTA draft text on Thursday. Their reports were submitted in the last week of April.
South Korea and the U.S. concluded their FTA negotiations on April 1, pledging to remove trade barriers across the board. When ratified by respective legislatures, it would be the first U.S. FTA with an Asian partner and the largest for the U.S. since the North American FTA signed in December 1994.
Autos turned out to be one of the toughest negotiations as U.S. industries pushed hard for measures to level the heavy imbalance in South Korea’s favor. Last year, South Korea exported over 700,000 automobiles to the U.S. while importing some 4,000 American-made vehicles. Negotiation outcome includes tariff removals and dispute settlement mechanisms.
"In the agreement, the U.S. does not include a performance metric approach," a report by the automotive industry trade advisory committee said.
Ford said it was disappointed the U.S. did not accept the recommended approach to use leverage of preferential access for Korean automakers to ensure the full opening of the Asian country’s market. "Ford is also concerned that this agreement may at best perpetuate small volume opportunities for import manufacturers into Korea while completely opening the U.S. market to Korean imports," it said.
General Motors, on the other hand, said KORUS FTA "has addressed the auto industry’s concerns.
"In addition, it provides a deterrent to future Korean non-tariff barriers with a special accelerated dispute settlement mechanism containing snap back provisions," it said.
Labor is one sector the two countries may have to negotiate further to reflect trade policies presented by the new Democrat-controlled Congress, and its committee reacted harshly to the proposed FTA.
"Indeed, in terms of our national economic interest, the KORUS FTA presents the potential for significant negative economic impact on the United States, particularly on jobs and wages," said the report by the labor advisory committee.
"In this respect, the KORUS FTA is the most economically problematic trade agreement negotiated since NAFTA."
The agriculture sector, another area of tough negotiations, was rated satisfactory overall but was criticized for exclusion of rice and the yet-to-be-settled South Korean beef market reopening.
The majority opinion is that the KORUS FTA will benefit American farmers and ranchers by increasing export opportunities, the report by the agricultural policy advisory committee said.
"However, we are disappointed that rice was excluded from the agreement and note that the benefits will only occur for the beef industry if meaningful science-based trade is fully restored prior to the approval of this agreement by Congress," it said.
The intergovernmental policy advisory committee said its members "in principle" support the trade deal but noted their reservations on some of the provisions, including market access and investor-state dispute settlement.
The textile committee report said the members were unable to reach a consensus and expressed concerns that they did not have sufficient time to make a full assessment.
"Given that this agreement appears to be the most complicated FTA yet negotiated, at least with respect to the textile and apparel industries, this shortened time period creates considerable concern," it said.
