Global logistics: Obama’s plan to revisit U.S.-Korea Free Trade Agreement supported by UPS
June 29, 2010
Over the weekend, President Barack Obama said his administration is committed to resolving outstanding issues regarding the United States-Korea Free Trade Agreement (KORUS FTA) by November when he visits the country.
The U.S. and Korea inked the KORUS FTA in June 2007. At this time, the U.S. said that if approved this agreement would be the United States’ most commercially significant trade agreement in more than 16 years. And the U.S. International Trade Commission estimated that the reduction of Korean tariffs and tariff-rate quotas on goods alone would add $10 billion-to-$12 billion to annual merchandise exports to Korea.
By working to resolve these issues, Obama said it can result in “new jobs and opportunity for people in both our countries and enhance America’s competitiveness in the 21st century.”
But the trade agreement has been held up in Congress. A Reuters report said that much of the Congressional opposition is rooted in fear that the agreement will open the U.S. market to more South Korean cars and endanger the jobs of U.S. automakers that tend to vote Democratic. The report added that U.S. trade officials say that South Korean restrictions on U.S. beef are the other main obstacle blocking the pact.
And if this deal and other stalled U.S. trade agreements and Panama and Colombia were to come to fruition, there would be potential for them to help make significant inroads in Obama’s National Export Initiative goal, which vows to double U.S. exports over the next five years.
While this trade agreement remains at a standstill, the prospects of getting a deal done were soundly endorsed by UPS.
“South Korea has the 14th largest economy in the world and the increase in trade that will come from this agreement means more jobs and global competitiveness for the two countries,” said UPS Chairman and CEO Scott Davis in a statement.
UPS officials added that the company has supported the negotiation of the U.S.-South Korea Free Trade Agreement since its inception. UPS serves as a co-chair of a business coalition that is urging U.S. action, and it added that this agreement contains vital provisions for the express delivery industry, including enhanced market access and improved customs clearance times that allow companies like UPS to better serve its customers.
UPS spokesman Norman Black told LM that UPS unequivocally supports this—and all other pending—trade pacts.
“This is heartening in light of the President’s goal of moving the economy forward through the National Export Initiative,” said Black. “We all need to understand the value of trade and what it can do for the U.S. economy and to create jobs, despite complaints from critics who sometimes say it does nothing but remove jobs.”
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