USTR Schwab defends Korea FTA from auto industry criticism
Yonhap News, Seoul
USTR Schwab defends Korea FTA from auto industry criticism
5 June 2007
WASHINGTON, June 5 (Yonhap) — A top U.S. trade negotiator on Tuesday disputed American auto industry criticism of a free trade agreement (FTA) with South Korea, saying it was a "myth" to believe the pact works against carmakers.
Amb. Susan Schwab, the U.S. Trade Representative, was also candid about accepting new policy demands by the Democrat-controlled Congress, saying the alternative was to give up on FTAs.
South Korea and the U.S. on April 1 completed a draft text of their agreement, commonly referred to as KORUS FTA, which aims at eliminating tariff and non-tariff barriers to goods and services flowing between the two countries.
The draft is being reviewed by lawyers and trade experts, and the final text is expected to be signed by respective presidents by the end of June. Both the South Korean and U.S. legislatures need to approve the FTA.
While hailed as a significant pact with spillover effects into bilateral political relations, the agreement is under assault from some industries. The U.S. auto sector is a vociferous opponent, arguing that it does not do enough to guarantee equal market access to South Korea.
Schwab, speaking at a forum with the Women in International Trade, said she wants to "debunk" this myth and "emphasize the reality" of the accord.
"The KORUS FTA is a very strong agreement for U.S. automakers," she said, as it would immediately remove the 8-percent tariff on American automobiles and establish an unprecedented dispute settlement process.
The other reality, she said, is that South Korea needs to fully reopen its market to all U.S. beef.
"The KORUS FTA is not getting through Congress unless Korea fully reopens its market to U.S. beef — that includes boneless, bone-in, offals, and variety meats," said Schwab.
Seoul agreed in January last year to allow U.S. beef imports for boneless products from young calves, easing a two-year total ban imposed after the discovery of mad cow disease at an American cattle farm.
The U.S. has been pressing for a full lifting of the ban after the World Organization for Animal Health last month rated U.S. beef safe enough for export.
"As far as the administration is concerned, all that stands in the way are regulatory and technical matters," said Schwab.
The KORUS FTA has also been complicated by new trade policies set forth by the Democrats who took control of the Congress in the November election. The policies strengthen, among other things, FTA requirements on labor and environment.
Schwab acknowledged that the administration had to accept these demands.
Refusing them would have meant letting the pending FTAs and the Doha Round die because they all require congressional action, she said.
"Given that choice — between bipartisan cooperation or letting the U.S. trade agenda die — the administration chose the path of bipartisan cooperation," Schwab said.
