Dawdling on Korean Trade

By July 4, 2007Trade

An editorial in the Kansas City Star, “Stop dawdling on S. Korean trade”:

The U.S. and South Korea have signed a free-trade agreement that would give American exporters a bigger foothold in an increasingly important Asian economy. Most tariffs between the two countries would vanish in three years, and two-way trade — already at $79 billion a year — would rise by $20 billion…[snip]

Opponents complain that the accord fails to sufficiently open the South Korean auto market. Yet it would eliminate several key barriers. Korean tariffs on car parts would zero-out immediately, as would the Korean tariff on imported trucks. On the other hand, the 25 percent U.S. tariff on foreign trucks would phase out over a period of 10 years.

South Korea’s 40 percent beef tariff is also a problem: Under the agreement, it would take 15 years to phase out this barrier.

Even so, this would be the first free-trade deal with a major Asian economy. It would open new markets for U.S. producers of soybeans, autos, movies and processed foods, as well as banks, insurance companies and telecommunications companies.

South Korea imports $300 billion a year in goods and services. The National Association of Manufacturers says U.S. companies claim only 11 percent of that market.

If given an opportunity, American exporters can compete. Congress should not allow this agreement to languish.

As the Star notes, some provisions could be better, but do we make the perfect the enemy of the good, especially when the results of doing so will be mostly bad? The FTA eliminates tariffs on 95 percent of consumer and industrial products between the countries within three years. From the NAM’s news release (June 30):

“The U.S. – Korea negotiation resulted in a comprehensive agreement that came together in a short time and provides a broad scope of opportunities to most of America’s manufacturers,” said NAM President John Engler. “It contains the best IPR provisions and the strongest pro-competitive provisions we have ever seen in a trade agreement and its passage will be a real plus for most U.S. industries.”

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