Will Republicans use KORUS FTA to pressure the administration on try to move on the Colombian and Panamanian FTAs: GOP tactic threatens South Korea trade pact (Politico, December 14):
I missed this (thanks to Kushibo for the heads-up), but Jeffrey Schott of the Peterson Institute was talking about this possibility in October:
Will the Obama administration submit legislation only for the KORUS FTA, or will it try to “kill three birds with one stone” by linking FTAs with Korea, Colombia, and Panama into an omnibus implementing bill? The rationale for linking the three pacts is that members don’t want to vote three times on trade bills, so it is better to do them all together in a single bill. This strategy would probably mute a lot of the criticism from specific manufacturing firms about the KORUS FTA, since those firms benefit from the other pacts. Labor unions would continue to oppose all three FTAs—but members representing labor constituencies were never going to vote for these trade deals anyway.
However, the Colombia FTA no longer qualifies for fast track. Speaker Nancy Pelosi and the House Democrats changed a House rule in April 2008 nullifying the pact’s eligibility. Therefore, from a parliamentary perspective, it is unclear how a “3 in 1” bill would be handled.
If Democrats maintain control of the House, they will probably want to continue to defer action on the Colombia FTA. This strategy would provide time to press for more policy and judicial reforms in Colombia; it would also partially compensate labor constituencies for moving forward with the
KORUS FTA.
If Republicans gain control, however, the “3 in 1” strategy could be revived. House Democrats may prefer to accept one trade vote on FTAs if the China currency bill proceeds down a parallel legislative track, and thus they may passively accept House action that essentially annuls the 2008 rule change.
Ryan Russell pointed out in the comments that I originally misspelled "Colombia" as "Columbia." Fixed in August 21, 2011.
Sewell Chan: U.S. Plans for Trade Are Stalled (NYT, February 28):
Although the White House renegotiated a pivotal free-trade agreement with South Korea in December, scoring rare bipartisan praise, House Republican leaders have refused to allow the deal to move forward. They want the administration to make progress first on similar accords with Colombia and Panama that face stiff opposition from labor unions and liberal Democrats.
...
“We’ve made it clear that the time has run out on Colombia and Panama,” said Representative Kevin Brady, Republican of Texas, who leads the trade subcommittee of the House Ways and Means Committee. “It is time to move on them, along with Korea, in the first six months of this year.”
Mr. Brady said the three deals had to be submitted to Congress as a package. “It would do great damage to our bipartisan efforts on trade if the administration sends Korea up by itself right now,” he said.
From the USTR web site: "Assistant U.S. Trade Representative Wendy Cutler and Korean Deputy Trade Minister Choi Seok-young will meet in Seattle, Washington, December 17-19 to work on legal text for the recently concluded accompanying agreement to the U.S.-Korea trade agreement."
Jeffrey Schott of the Peterson Institute has a brief overview of the revisions to the agreement in this 3-page Peterson Institute Policy Brief: KORUS FTA 2.0: Assessing the Changes. Short, but nice for context - including some comments on interactions with KOREU FTA and a potential Doha Round agreement.
The UAW and United Food and Commercial Workers are for the deal, but
The machinists’ union has denounced the Korea deal, while two other powerful unions, the steelworkers and the communications workers, will announce their opposition on Thursday, union officials say.
And the AFL-CIO will probably come out against the agreement Thursday as well:
The nation’s main labor federation, the A.F.L.-C.I.O., is usually quick to denounce trade agreements, but so far it has been silent about the Korean pact, apparently because of the disagreement among its member unions.
Several union officials said, however, that the A.F.L-C.I.O. would issue a statement early Thursday criticizing the Korean deal, in particular for not doing more to protect the rights of workers to unionize in both South Korea and the United States.
Steven Greenhouse: U.S. Union Backing Helps Korea Trade Pact Chances
Evan Ramstad reports on "Fistfight Theater in Korea Parliament":
South Korea’s parliament has no filibuster or any other method for opposition parties to slow down legislation they don’t like. Most of the time, the opposition party lawmakers simply vote their votes and let the ruling party take responsibility for good or bad legislation.
But when lawmakers want to show that they really don’t like what the ruling party is doing, they resort to trying to physically control the chamber where the vote takes place. And their staffers are enlisted into a day or two of shoving, pushing, furniture stacking and unstacking, barricading doors, occupying podiums, yelling, singing, hair-pulling and so on.
Generally, it is mayhem that stays within limits. For instance, in July 2009 when opposition lawmakers engaged in fisticuffs to express displeasure with media-reform bills, they made a deal with ruling lawmakers to shove each other with their chests and shoulders and not lift their arms and hands to each other, according to staffers.
...
This is from a much longer blog post with lots of pictures.
Seeking Alpha: How 'Free Trade' Impacts My Portfolio
The original Korea-U.S. FTA agreement was signed in time (July 1, 2007) to qualify for expedited consideration by Congress under Trade Promotion Authority (TPA or fast track). But this supplemental agreement, which changes specific elements of the original, was not.
Scott Lincicome lays out options, with their shortcomings, here: KORUS and TPA, ctd. Highly recommended. It's apparent there's no bullet-proof way forward.
Will KORUS FTA create the jobs the administration is hoping for (Obama: South Korea free-trade deal will create U.S. jobs)? Will it lead to the job losses its left-wing opponents claim (Free Trade Agreement with Korea will cost U.S. jobs)?
Paul Krugman says that "Trade Does Not Equal Jobs":
One thing I’m hearing, now that all hope of useful fiscal policy is gone, is the idea that trade can be a driver of recovery — that stuff like the South Korea trade agreement can serve as a form of macro policy.
Um, no.
Our macro problem is insufficient spending on U.S.-produced goods and services; this spending is defined by
Y = C + I + G + X – M
where C is consumer spending, I investment spending, G government purchases of goods and services, X is exports, and M is imports. Trade agreements raise X — but they also lead to higher M. On average, they’re a wash.
This, by the way, is why claims that the Smoot-Hawley tariff caused the Great Depression are nonsense. Yes, protectionism reduced world exports; it also reduced world imports, by the same amount.
There is a case for freer trade — it may make the world economy more efficient. But it does nothing to increase demand.
And there’s even an argument to the effect that increased trade reduces US employment in the current context; if the jobs we gain are higher value-added per worker, while those we lose are lower value-added, and spending stays the same, that means the same GDP but fewer jobs.
If you want a trade policy that helps employment, it has to be a policy that induces other countries to run bigger deficits or smaller surpluses. A countervailing duty on Chinese exports would be job-creating; a deal with South Korea, not. If you want the Korea deal, fine; but don’t claim virtues for it that it doesn’t possess.
The United Auto Workers is on-board for KORUS FTA (UAW statement on the proposed U.S.-Korea Free Trade Agreement):
The UAW joins Congressman Sander Levin in his statement that, “The changes announced to the U.S. – Korea Free Trade Agreement (FTA) today are a dramatic step toward changing from a one-way street to a two-way street for trade between the U.S. and South Korea. These changes represent an important opportunity to break open the Korean market for U.S. businesses and workers and boost American manufacturing jobs, particularly in the automotive sector.”
...we believe an agreement was achieved that will protect current American auto jobs, that will grow more American auto jobs, that includes labor and environmental commitments, and that has important enforcement mechanisms.
...
This agreement is an important step toward a global rule-based trade system, an important step in giving labor a real voice in trade negotiations. We look forward to working with the Obama Administration on the issue of global rights for workers -- especially the right to organize and bargain collectively.
What's the AFL-CIO going to do (UAW under file for trade deal support)?
Organized labor is in an uproar over the new free trade agreement with South Korea, with some union leaders accusing United Auto Workers president Bob King of embracing a deal to curry favor with a White House that saved the UAW with its $80 billion bailout of the auto industry.
King denied the charge in an interview Monday and said he would work to convince his fellow union presidents to support the agreement, predicting that “ they will see that this a good deal for our members, and they will respect that.”
AFL-CIO president Richard Trumka hasn’t rendered a verdict yet on the deal reached Friday between U.S. and South Korean negotiators, despite the labor federation’s longstanding position opposing trade deals that don’t include rules that would require other countries to improve workplace and environmental standards to slow the loss of American jobs overseas.
A draft statement criticizing the trade deal has been sitting on his desk since last week, as he continues to work the phones gauging whether to condemn the deal, or stay neutral.
...
Trumka has told at least one Democratic member in Congress that the AFL-CIO would might decide to skip a fight with the White House over South Korea to preserve its leverage in China policy, according to a source who spoke to that lawmaker.
Scott Lincicome's KORUS Afterthoughts include questions about the applicability of the Trade Promotion Authority (Fast Track) to the supplementary deal:
...I'm very curious as to whether this "new" agreement will be covered by the now-expired Trade Promotion Authority (aka "fast track"), which subjects trade agreements completed and signed before July 1, 2007 to strict procedural requirements and thus prevents congressional meddling. A few observers are assuming that TPA will apply because the original agreement was signed on June 30, 2007, but the law on TPA (19 U.S.C. 2191-2194 and 3803-3805) states, inter alia, that it will cover trade agreements "entered into" by the President before July 1, 2007. Thus, it appears that whether TPA applies to the KORUS will rest entirely on whether the 2010 changes on autos, beef, etc. mean that the agreement wasn't "entered into" until now. The changes announced to the FTA - especially those affecting the countries' previously-agreed tariff schedules - almost certainly constitute substantive changes to the agreement, so I'm having a very hard time figuring out how someone can seriously argue that TPA will apply - i.e., that the agreement wasn't substantively modified such that it must be re-signed and "entered into" again. [Note: USTR is calling this a "supplemental agreement," so maybe they're going to spin this as outside the original agreement, but that seems like a pretty hard sell considering that specific tariff lines, present in the original agreement, have been changed by the 2010 pact.]
And trust me, this is no small matter - if TPA doesn't apply, then all of its important procedural limitations - short timelines, limited committee consideration, no amendments, etc. - don't apply. And, as I discussed a few weeks ago, TPA effectively prevents a few powerful congressmen or senators from singlehandedly derailing the deal (through procedural maneuvers, "poison pill" amendments and other nasty things)....
Congressman Michaud of Maine doesn't like it: Michaud Responds to Deal on Korea-US Trade Agreement.
Neither does Lori Wallach of Public Citizen’s Global Trade Watch: Obama’s Decision to Push Bush’s NAFTA-Style Korea Trade Deal Without Real Fixes Is Major Policy, Political Mistake.
Max Baucus, Democrat from Montana, and chair of the Senate Finance Committee, thinks more should have been done to address Korean restrictions on beef imports: Baucus Deeply Disappointed With Announcement on Korea Trade Deal, Commits to Keep Fighting for American Ranchers.
Auggie Tantillo of the American Manufacturing Trade Action Coalition is concerned (U.S. Sets Sweeping New Deal on Trade):
Even before its full details were released, trade skeptics in the U.S. assailed the deal as doing too little to protect U.S. workers. "If the flaws that industry identified in the agreement were not fixed, then this deal could offshore tens of thousands of additional U.S. manufacturing jobs," said Auggie Tantillo, executive director American Manufacturing Trade Action Coalition, which had pressed for greater action on textile industry-related tariffs and customs-enforcement language.
Lee Tae-hoon reports for the Korea Times that Korean opposition parties in the National Assembly are not happy, "Opposition to block ratification of FTA":
Opposition parties Sunday vowed to block the National Assembly’s endorsement of the revised free trade deal (FTA) with the United States, saying the government has made excessive concessions in the “humiliating negotiation”.
Citing a report, Sohn Hak-kyu, chairman of the main opposition Democratic Party (DP), estimated that Seoul made concessions worth 3 trillion won ($2.64 billion) to Washington in return for new demands worth 300 billion won.
The DP leader said that his party is mulling over whether to demand a complete revision of the bilateral trade deal in an attempt to seek revisions in the ratchet clause that bars going back to the pre-FTA days and the investor-state dispute (ISD) system, which allows investors to file suits against each other’s government for possible unfair treatment.
DP floor leader Park Jie-won said his party will join forces with civic groups and other opposition parties, including the Liberty Forward Party (LFP), to address the problems of the revised bilateral trade deal in an attempt to block its parliamentary ratification.
“Our party cannot tolerate the disgraceful negotiation process and will not accept the lopsided deal,” Park said shortly after Trade Minister Kim Jong-hoon’s briefing on the results of the FTA renegotiation.
Opposition parties pointed out that the timing of the renegotiation was ill-guided as it took place when the nation’s security heavily depends on U.S. forces and inter-Korean tensions reached a new peak due to Pyongyang’s artillery attack on Yeonpyeong Island on Nov. 23.
“The government failed to protect the nation’s interests by holding the talks at a time when it desperately needs military cooperation from the United States,” the LFP said in a statement.
This week's negotiations dealt with auto issues and didn't lead to an agreement with the Koreans on beef.
Senator Max Baucus of Montana, the Democratic chair of the Senate Finance Committee, is "deeply disappointed": Baucus Deeply Disappointed With Announcement on Korea Trade Deal, Commits to Keep Fighting for American Ranchers.
Washington DC - Senate Finance Committee Chairman Max Baucus (D-Mont.) today expressed deep disappointment following the Administration’s announcement on the U.S. – Korea free trade agreement (FTA). Baucus has long fought for the interests of American ranchers in discussions on the agreement.
“I am deeply disappointed that today’s deal fails to address Korea’s significant barriers to American beef exports, which President Obama identified this June as one of the critical outstanding issues that must be resolved before moving this free trade agreement forward,” said Baucus. “I am deeply committed to righting this wrong and will work with the Administration in the period ahead to ensure that America’s ranchers and farmers are not left behind. I will reserve judgment on the free trade agreement until then.”
Senator Baucus has long called for the United States and Korea to negotiate a FTA to expand bilateral economic ties. The two countries entered into a FTA on June 30, 2007, but failed to adequately address longstanding concerns about Korea’s restrictions on U.S. beef and auto exports. In April 2008, Korea agreed to open its market to all ages and cuts of U.S. beef, consistent with international scientific standards. But Korea continues to limit imports to U.S. beef from cattle under 30 months. On June 26, 2010, President Obama and President Lee agreed to resolve U.S. concerns regarding barriers to U.S. beef and auto exports. Baucus has sought assurances that Korea is committed to a road map to accept U.S. beef from cattle of all ages.
The Senate Finance Committee has exclusive jurisdiction over international trade.
U.S. beef is currently subject to a 40% tariff. The agreement, as it is, eliminates the tariff over 15 years. That's a big benefit for U.S. ranchers, and should give a helpful price edge in their competition with Australian producers.
Jonathan Dingel at Trade Diversion wonders "Will the revised Korea-US PTA be fast tracked?" Trade promotion (fast track) authority covered agreements entered into before July 1, 2007.
Also, does the new agreement mean it's "Back to square one in the National Assembly?"
The White House description of the auto measures in today's agreement is here: Increasing U.S. Auto Exports and Growing U.S. Auto Jobs Through the U.S.-Korea Trade Agreement.
This fact sheet only lists auto measures - additional measures are described by Mark Drajem for Bloomberg: South Korea, U.S. Rework Trade Accord to Appease Ford on Tariff Timetable. Additional measures described in this story by Cathy Rose A. Garcia for the Korea Times: Korea, US agree on delay on car tariffs. This story, by Choi He-suk in the Korea Herald, mentions a U.S. concession on medical issues: Korea defends car concession. This story, by Jung Seung-hyun for JoongAng Daily, provides a tad more detail on the medicines: A ‘win-win’ compromise breaks FTA deadlock
Here's a list of supporters: Statements of Support for the U.S-Korea Trade Agreement. After today, these supporters include:
Today's agreement, described as the "2010 Supplemental Agreement," includes:
Drajem points to U.S. concessions on Korean pork tariffs:
In exchange the U.S. agreed to higher tariffs on its pork products for a longer time period, a change that U.S. pork producers said they would accept.
“To get a final agreement, we needed to give a little, we needed to take one for the team,” Sam Carney, president of the National Pork Producers Council, said in a statement. “This is still a good deal for us.”
No concessions on beef, however.
Rose-Garcia adds details on the pork concession and explains that there was also a U.S. concession on visas:
In exchange for these concessions, Korea will be allowed to extend tariffs on American pork by two years to 2015. Korean workers, who are assigned to U.S. offices, will be allowed to have a five-year visa rather than the current three-year one.
Choi He-suk says:
In return, Korea made some gains in rules on pork, medicine and work visas. It also made no concession on beef imports.
Jung Seung-hyun says,
...the sale of Korean generic medicine in the U,S, will not be subject to patent or other disputes for three years instead of 18 months.
This post has been updated as new stories provide new details.
The FTA turns up, pretty innocuously, in some of the U.S. State Department cables released through Wikileaks. Cho Jin-seo read them and summarized them for The Korea Times: Wikileaks shows Obama, Lee in same boat for FTA, G20
Martha C. White in Slate: Trade Policy 101. What's in those free-trade agreements—and do they really boost exports? This is a useful survey of the issues typically addressed in an FTA - an FTA is much more than just tariff reductions - and the debates that they evoke.
The negotiators have come to agreement. Howard Schneider reports for the Washington Post: U.S. and Korea complete trade deal:
Details of the pact - the Obama administration's first major foray into the arena of free trade politics - are expected to be released on Friday evening. But sources familiar with the talks said it provides key concessions for the U.S. automotive industry, including a slower reduction of tariffs on South Korean imports and provisions that should make it easier for American firms to crack the South Korean market.
Elizabeth Williamson reports that negotiators are "are down to one main sticking point," the time frame over which the 2.5% U.S. tariff on autos will be phased out. In the original agreement, the tariff on cars with small gas engines would be eliminated immediately, and the tariff on cars with larger gas engines and diesel engines would be eliminated over three years.
People involved in the talks were optimistic about the chances for a deal, calling the narrow focus on the tariffs issue a sign of progress.
...
While agreeing to a pact that would phase the tariff out over a half decade or so would be seen as a victory for the U.S. side, its economic benefit could be dwarfed by normal currency fluctuations. In November alone, the dollar rose 0.4% against the South Korean won, virtually equivalent to the level a one-year tariff reduction would provide.
Here: U.S.-Korea Pact Hinges on Auto (Wall Street Journal).
Doug Palmer, the Reuters trade reporter, tweets that talks may go to a fourth day.
Palmer's story here: the negotiations continued into Thursday night.
Ju-min Park also reports for Reuters: U.S., Korea make headway on trade talks: report. This report was filed at the close of the third day's meeting, which went late into the evening. The focus is on comments by the Korean trade minister: he sees progress, there will be a fourth day, there is the prospect of a further extension (a fifth day? or a further meeting? not clear), and the meeting appears to be focused on cars:
"Beef was not discussed," the Yonhap quoted Kim as saying.
Palmer quoted Kim going into the afternoon session saying the two sides were "far away" from an agreement. In Park's late night story Kim is more upbeat.
From the Wall Street Journal's "Korearealtime" blog: Another Day for U.S.-Korea Trade Talks.
From a Yonhap report in the JoonAng Daily: FTA talks with U.S. extended, with focus on auto import. This report says the focus of the negotiations remains on autos and that beef hasn't been discussed. The third day is described as a "last-minute" effort, after differences over autos couldn't be resolved on Wednesday:
Emerging from a late evening session with U.S. Trade Representative Ron Kirk at a hotel in Columbia, Maryland, Korean Trade Minister Kim Jong-hoon told reporters, “We still have a long road ahead.”
...
Talks have been focused on to what extent Seoul will ease safety and environmental standards and delay the elimination of the 2.5 percent tariff on most autos and auto parts, as well as a phaseout of the 25 percent tariff on light trucks.
...
“Korean negotiators are continuing to resist U.S. demands for additional concessions in the auto sector, such as a longer phaseout for a U.S. car tariff, and are insisting that any major concessions they make would have to be offset with U.S. concessions on agriculture,” online magazine World Trade Online.
Limited reporting this morning about the first day's negotiations in Columbia, Maryland. Here's a short story from Jung Seung-hyun and the JoongAng Daily: Outcome still uncertain on FTA talks with U.S..
The story suggests that the U.S. didn't introduce new issues ("nothing has changed and the same matters are being discussed"), that the U.S. focus the first day was on autos ("the issue of revising limits on U.S. beef imports had not been raised in the talks"), and that the U.S. won't get something for nothing ("the current negotiations involved a “package deal,” suggesting that Korea would seek unspecified concessions from the U.S. in return for revising the auto standards.").
The Koreans are not averse to extending the negotiations a day or so if necessary. Follow up negotiations would occur in Korea.
The U.S. and Korean trade chiefs meet near Washington tomorrow and Wednesday to work towards resolution of the issues left over from the G-20 summit in Seoul. The U.S. is pressing Korea to give ground:
The U.S. will reportedly request South Korea to abolish the tariffs on U.S. exported beef earlier and open the market to U.S. processed beef products. It also appears that the U.S. will repeat its demand of more concessions from South Korea in auto issues including the extension of 2.5 percent-tariff abolition deadline on South Korean cars, the total abolition of duty drawbacks, adoption of safeguards and an easing environmental regulations. (KORUS FTA renegotiations resume)
Korea currently allows only imports of American beef from cattle less than 30 months old over fears of mad cow disease, while the U.S. has been demanding the country accept all cuts of beef irrespective of cattle age. (Korea, US to resume FTA talks)
A Congressional Research Service report from September (Pending U.S. and EU Free Trade Agreements with South Korea: Possible Implications for Automobile and Other Manufacturing Industries) provides some helpful background on the auto issues.
How might Korea respond on autos:
According to officials close to the talks, Korea appears willing to compromise on the key issues related to auto trade, and it’s possible that the countries could agree on a new set of rules regarding fuel efficiency, emissions and safety requirements for American cars sold in Korea.
Regarding the issue of duty drawbacks, the countries will likely settle for Korea employing a five-percent cap on the refundable tariffs, identical to the condition agreed on its FTA with the European Union (EU).(Korea, US to resume FTA talks)
What about beef:
It remains to be seen, however, whether beef will continue to be the deal breaker.
The Koreans, reluctant to touch the subject due to public sensitivity here, have been insisting repeatedly that beef should have no part in the FTA talks, only to be flustered by the U.S. attempts to bring the issue back again and again to the negotiating table. (Korea, US to resume FTA talks)
Does Korea want anything in exchange for all this:
Korea will prepare new strategies before resuming free trade talks with the U.S. next month in Washington, a high-ranking official at the Korean Foreign Affairs and Trade Ministry said Wednesday.
“Further rounds of negotiations will be impossible if we adhere to our current clauses. We are preparing new strategies,” the official said.
The new plan is known to include the protection of Korea’s relatively vulnerable pharmaceuticals and agricultural markets. On pharmaceuticals, Seoul will ask Washington to delay by 18 months a ban on the sale of reproduced American drugs in Korea before the patents expire for the original drugs.
The Korean government will also strengthen safeguard measures for agricultural products.
In addition, adjustment of what Korean opposition parties call “poison pill” clauses is under review. These include the negative list system for services allowing the opening of all service products except those specifically prohibited and a ratchet clause that bars going back to pre-free trade deal days.
Seoul, however, will not exclude the maligned investor-state dispute settlement clause, which allows a private investor to legally challenge a host government`s public policy.
A high-ranking Korean Foreign Ministry official said, “The government believes that the investor-state dispute settlement mechanism is not a poison clause but something Korea needs. We won’t cover it in our next round of negotiations.”
Another official said, “We’ll include important items we requested in negotiations in 2007 but left out in the final agreement. We are preparing various cards.” (New strategies prepared for next month`s FTA talks with US)
Is that all the U.S. wants? Obama recently entertained a Congressional delegation skeptical of current approaches to trade agreements. The group's leader "outlined for the president changes that he and others in the group want in a pending free-trade agreement with South Korea: clearer labor standards, more targeted tariff reduction for small and medium manufactures, and more focus on trade deficit reduction." (The Korea - U.S. FTA: Negotiating with Congress).
Are the U.S. and Korea more likely to compromise given North Korea's actions over the last couple of weeks?
Kim Tong-hyung: "Korea, US to resume FTA talks", Korea Times. For two days, starting Tuesday, November 30, in Columbia, Maryland.
Korea and the U.S. have plenty to think about right (North Korean Shells Shatter Illusions of Security as Wargames Turn Deadly). Korea's deputy minister of Foreign Affairs and Trade says that a date hasn't been set yet to renew the negotiations:
“A specific date for additional discussions between Korea and the United States has not been finalized yet. We will fix a date soon after talking with Washington,” Ahn Ho-young, deputy minister of Foreign Affairs and Trade, said in a weekly press briefing.
“It is not a meeting that can take place anytime, and it may take some time, as we are aware that both sides were still poles apart from the first discussion and we need to narrow gaps in opinions beforehand.”...
Does the second paragraph imply some sort of informal back and forth to "narrow gaps in opinions".
Kang Seung-woo."ROK, US having hard time fixing FTA talk schedule." The Korea Times. November 24
... they're going to want something in return.
The Dong-a Ilbo (New strategies prepared for next month`s FTA talks with US) reports that on Wednesday in Seoul, "a high-ranking official at the Korean Foreign Affairs and Trade Ministry" gave some hints about the Korean wish list:
The new plan is known to include the protection of Korea’s relatively vulnerable pharmaceuticals and agricultural markets. On pharmaceuticals, Seoul will ask Washington to delay by 18 months a ban on the sale of reproduced American drugs in Korea before the patents expire for the original drugs.
The Korean government will also strengthen safeguard measures for agricultural products.
In addition, adjustment of what Korean opposition parties call “poison pill” clauses is under review. These include the negative list system for services allowing the opening of all service products except those specifically prohibited and a ratchet clause that bars going back to pre-free trade deal days.
Seoul, however, will not exclude the maligned investor-state dispute settlement clause, which allows a private investor to legally challenge a host government`s public policy.
We were trying to get concessions from the Koreans on autos and beef. Are we about to go after concessions on autos, beef, labor, investment, finance, targeted tariff reduction for small and medium manufactures, and more focus on trade deficit reduction: The Korea - U.S. FTA: Negotiating with Congress.
...endorses the KORUS FTA, and free trade in general: SARAH PALIN: An Open Letter to Republican Freshmen Members of Congress:
On foreign policy and national security, I urge you to stick to our principles: strong defense, free trade, nurturing allies, and steadfast opposition to America’s enemies....Thanks to Scott Lincicome and Simon Lester for the pointer. Lester had discussed the Tea Party stance on trade earlier, here: The Tea Party and Free Trade).
Kevin Brady of Texas, who is likely to be the new chair of the House Ways and Means Committee Subcommitte on Trade, has a good record on opposition to trade barriers: he voted on the right side of the trade barrier votes tracked by the Cato Institute 82% of the time.
He's also had nice things to say trade with other nations: Key House Republican Plans Aggressive Push For Trade Deals. But this statement from last Thursday (November 11) suggests he likes the idea of pressing Korea for additional auto and beef concessions:
Washington, DC - U.S. Congressman Kevin Brady, the top House Republican on the Trade Subcommittee of the Committee on Ways and Means, released the following statement related to the U.S.-South Korea trade agreement negotiations:
"I am disappointed that the outstanding auto and beef issues surrounding the U.S.-South Korea trade agreement have not been resolved. I hope that these issues can be resolved quickly and sufficiently so we can take full advantage of the market opportunities that this agreement presents for the United States." ...
Scott Lincicome wonders who was responsible for the FTA "debacle" in Seoul - does the fault lie with Obama, or with Congressional pressure: Did Congressional Pressure, not White House Incompetence/Politics, Really Derail the KORUS?
The Korean National Assembly's Committee on Foreign Affairs and Trade approved the KORUS FTA in April, 2009, clearing the way for consideration by the full National Assembly. That's as far as its gotten.
Now the Assembly's research arm asserts that:
...the FTA includes a clause stating that all annexes and supporting documents "form an inextricable part" of the agreement, implying that renegotiations on any portion of the deal obligate parliament to review the entire pact once again.
As a result:
...any amendments to its current accord with the U.S. will cause parliament to scrap the original version, which has not yet received approval, and consider the new version for ratification.
This has implications for the current negotiation:
Meanwhile, the ruling Grand National Party has asked the government to aim for a revised agreement that does not require reendorsement by the parliamentary committee on foreign affairs and trade, citing concerns that the additional step could create further backlash from rival parties opposed to the FTA.
Any changes to U.S. FTA to require new ratification process: think tank, Yonhap, November 15, 2010
The story only mentions the Foreign Affairs and Trade Committee, but I remember 2009 action by a Judiciary Committee as well. What is the normal process for legislative action to ratify and implement a trade agreement in Korea?
The Ways and Means Committee is the key House committee for the FTA. The next Ways and Means Chair is likely to be Republican David Camp of Michigan, and he wants more on autos.
Camp and the current chair, Democrat Sander Levin (also from Michigan), released a short joint statement on the FTA Thursday:
Further negotiations will succeed only if South Korea adopts concrete steps to open its market to U.S. exports. While there are other unresolved issues, nowhere is this more evident than in the dangerously lopsided trade in automotive vehicles. In 2009 alone, South Korea exported more than 476,000 autos to the U.S. while fewer than 6,000 U.S. vehicles managed to get through Korean trade barriers. There is a basic principle at stake with a very practical impact on American jobs. When U.S. industry has the ability to compete, we can succeed. But we must insist on open, reliable access to another country’s market, as our market is open to their goods. It was essential for our government today to deliver a strong message by insisting on a two-way street for trade with South Korea. (Camp's website)
Kim Dixon and Doug Palmer quoted Camp to similar effect the day after the election:
"I think it's up to the Koreans to decide whether they really want to have an agreement or not," said Representative Dave Camp, who is expected to become chairman of the House of Representatives Ways and Means Committee next year.
"I think particularly in the auto sector, as well the beef sector, those have been the two problem areas that we need to see some progress in," Camp said.
Camp has just won his 11th term representing Michigan's Fourth Congressional District. The Fourth District includes central and northwest Michigan. This is rural and small town Michigan. "Visitors heading north from Lansing and Grand Rapids for summer fishing or winter skiing encounter the small towns dotting the landscape and sugar beets, red tart cherries, corn or potatoes growing in the fields. Agriculture, tourism, and recreation fuel a large portion of the area's economy." (Camp's website)
But as Dixon and Palmer note -
...Camp's stance on South Korea shows how important regional influences can be.
His home state of Michigan remains the heart of the U.S. auto industry and has the second highest unemployment rate in the country at 13 percent.