U.S. Trade Representative Ron Kirk is scheduled to meet today with Korean Trade Minister Kim Jong-hoon in San Francisco to discuss the pending U.S.-Korea Free Trade Agreement. Hopes are high that with this discussion some lingering issues (autos and beef) holding up the pact could be resolved before President Obama’s upcoming meeting with South Korean President Lee Myung-bak at the G-20 Summit in Seoul in mid-November.
The National Association of Manufacturers has focused on the importance of the FTA in building market share for U.S. manufacturers, who, with the stalled trade agreement, are losing out to countries that have already signed trade agreements reducing tariffs for their goods and services exported to South Korea. An earlier post at OpenMarket made that point as well.
South Korea has not been shy about entering into trade deals. Just this month, the European Union and South Korea signed a trade agreement that opens up both markets. According to the Korea Herald,
South Korea has so far signed six FTAs with 17 countries including Chile, Singapore, the four-member European Free Trade Association (Norway, Switzerland, Iceland and Liechtenstein), the 10-member ASEAN, India and the U.S. All of them except for the one with the U.S. have taken effect.
The agreement is expected to abolish about 95 percent of tariffs on all industrial and consumer goods within three years, and remove most of the lingering 5 percent within a decade. According to a study by the U.S. International Trade Commission, the deal would increase U.S. GDP by $10.1-11.9 billion, and may boost annual trade between the countries by as much as $17.8 billion. But critics ignore those gains.
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The KORUS-FTA is not a perfect agreement, but it would generate so many economic and political gains for the U.S. that the benefits appear greater than its attendant problems. It would increase U.S. GDP by $10.1- 11.9 billion and bilateral trade by $17.8 billion annually, boost America’s standing in the region, and generate momentum for the cause of global free trade. Finally, to ratify it would bolster good relations with South Korea, an important ally, which negotiated and renegotiated the agreement in good faith.
An agreement that would make sense economically and politically — what’s not to like?