U.S., Korea make progress on trade pact

The White House announced late last week that the United States and Korea have reached a resolution regarding issues relating to the U.S.-Korea trade agreement.

White House officials said that the agreement is an integral part of President Obama’s efforts to increase opportunities for U.S. businesses, farmers, and workers through improved access for their products and services in foreign markets and also supports the Administration’s goal of doubling U.S. exports by 2015.

The White House added that the U.S. International Trade Commission has estimated that the tariff cuts alone in the U.S.-Korea trade agreement with increase U.S. exports by $10-to-$11 billion and would eliminate tariffs on more than 95 percent of industrial and consumer goods within 5 years.

This agreement, if approved by Congress, would improve U.S.-Korea relations on many fronts, including automobiles, manufacturing, services, agricultural products, investment, financial services, government procurement, labor rights, and environmental commitments.

“The U.S.-Korea trade agreement will make America more competitive in a fast-growing market and help put tens of thousands of Americans to work right here at home,” said U.S. Secretary of Commerce Gary Locke in a statement. “Thanks to this agreement, billions of dollars worth of American goods and services – ranging from cars and industrial equipment to delivery and telecommunications services – will be able to compete on a level playing field in the Korean marketplace. Knocking down trade barriers is one of the key planks of President Obama’s National Export Initiative, and I commend Ambassador Kirk and his team at USTR for negotiating a deal that will have immense benefits for American businesses and workers.”

Should this deal get approved, it would be the largest trade deal completed by the U.S. since the North American Free Trade Agreement (NAFTA) with Mexico and Canada was completed in 1994, according to various reports.

This news follows a June report that indicated President Obama was committed to resolving outstanding issues regarding the United States-Korea Free Trade Agreement (KORUS-FTA).

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. 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 with 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.

“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 last summer.
“South Korea is our seventh largest trading partner and we need to protect and expand that relationship.”

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 in a June interview. “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.”