Negotiators from the United States and South Korea appear to have reached a tentative deal on a free-trade agreement that would help solidify American relations with a leading ally in East Asia.
The agreement was apparently reached after a marathon round of talks this week in Columbia, Md., only three weeks after discussions in Seoul, South Korea, failed to yield a deal. Officials with knowledge of the talks said that North Korea’s shelling of a South Korean island, which has galvanized anxieties in East Asia, added momentum on both sides to strengthen economic ties between Washington and Seoul.
Details of the agreement were not expected to be released until Friday night, which would be Saturday morning in South Korea.
But an official with a private sector organization that was briefed on the agreement said that the deal came together after South Korea agreed to give the United States five years to phase out a 2.5 percent tariff on Korean-built cars, rather than ending the tariff immediately.
So, South Korea would have to wait a bit to flood the US market with cars, but there’s no word on whether they would have to allow in more than a trickle of US-made cars into their market (the numbers from last year: 6,000 US vehicles to South Korea, 500,000 South Korean-made vehicles to the US). And what about beef producers, who also balked at blocked Korean markets?
The President wanted to ink this pact at the G-20 in Seoul, but they couldn’t reach agreement. It looks like those hurdles have been surmounted.
The advocacy community is not pleased:
Public Citizen, a left-leaning nonprofit organization that monitors global trade, criticized the apparent deal, saying that the accord, as negotiated by the Bush administration, would allow foreign investors to move American jobs offshore. Public Citizen said the agreement also did not contain strong enough provisions for labor protection and financial regulation.
“Choosing to advance Bush’s Nafta-style Korea free trade agreement rather than the new trade policy President Obama promised during his campaign will mean more American job loss, and puts the White House at odds with the majority of Americans who, polling shows, oppose more-of-the-same job-offshoring agreements,” Lori Wallach, who runs Public Citizen’s Global Trade Watch project, said in a statement.
The agreement would have to pass the Congress. I’m wondering how the Tea Party faction will react to a corporate-written trade deal. Why, surely you can’t tell me that they’d support it, being so independent and anti-corporate and that!
I am very pleased that the United States and South Korea have reached agreement on a landmark trade deal that is expected to increase annual exports of American goods by up to $11 billion and support at least 70,000 American jobs. Last month in Seoul I directed our negotiators to achieve the best deal for American workers and companies, and this agreement meets that test.
American manufacturers of cars and trucks will gain more access to the Korean market and a level playing field to take advantage of that access. We are strengthening our ability to create and defend manufacturing jobs in the United States; increasing exports of agricultural products for American farmers and ranchers; and opening Korea’s services market to American companies. High standards for the protection of worker’s rights and the environment make this a model for future trade agreements, which must be both free and fair.
Today’s agreement is an integral part of my Administration’s efforts to open foreign markets to U.S. goods and services, create jobs for American workers, farmers and businesses, and achieve our goal of doubling of U.S. exports over five years. It deepens the strong alliance between the United States and the Republic of Korea and reinforces American leadership in the Asia Pacific. I look forward to working with Congress and leaders in both parties to get this done and to ensure that America competes aggressively for the jobs and markets of the 21st century.
The White House also sent over a long list of folks who rushed out statements of support of the agreement, including members of both parties (Steny Hoyer, Sander Levin, Alyson Schwartz, Dave Camp and Kevin Brady), the CEOs of all kinds of companies (including Ford, who was initially opposed), trade group heads, and weirdly, Jamie Dimon and Vikram Pandit. Here’s Alan Mullaly of Ford:
“As a global company committed to free trade, Ford Motor Company applauds the outlines of the revised U.S.-Korea Free Trade Agreement that were announced today. President Barack Obama and U.S. Trade Representative Ron Kirk vigorously advocated the important principle of two-way trade, and the resulting agreement provides greater clarity and transparency by affirmatively addressing the issues surrounding non-tariff and tariff barriers. These new provisions provide Ford greater confidence that we will be able to better serve our Korean customers. We deeply appreciate the tireless efforts of the Obama Administration and Congress to improve this agreement and open the Korean auto market.” [Ford Motor Company, 12/03/2010]