This week (Wednesday) marked the third anniversary of the signing of the U.S.-Korea Free Trade Agreement (KORUS FTA). We were prepared to highlight that, three years later, the agreement had not moved one inch closer to Congressional consideration. However, last Saturday in Toronto at the G-20 Meeting, President Obama announced that his Administration would begin discussions with the Korean government to address the outstanding issues in autos and beef that have prevented forward progress of the FTA thus far. The President also indicated that he wanted to see these discussions completed by November 2010, so he can move the agreement forward for Congressional consideration in the following months.
This is encouraging news. The President recognized back in the State of the Union, when he announced the National Export Initiative (NEI) and the goal of doubling U.S. exports in five years, that strengthening our trade relations with key partners like South Korea, Colombia and Panama were part of this overall plan. He noted in an interview last year in Seoul that he wanted to move the KORUS agreement. This is an important stride forward. For manufacturers, who support this agreement wholeheartedly, it is a very positive development.
The NAM is a strong supporter of the KORUS agreement. Korea is our seventh largest trading partner. The U.S. International Trade Commission estimates that after the agreement is in force, U.S. exports could rise by $10-12 billion dollars. Tens of thousands of new manufacturing jobs that will be created as a result of increased exports, according to the U.S. Department of Commerce. Hundreds of thousands of U.S. jobs depend already on existing exports of manufactured products to Korea. We risk those jobs by not moving forward on the KORUS agreement as quickly as possible – already, the EU is close to implementing their own FTA with Korea, which will make their exports far more competitive. We cannot fall behind in crucial markets like Korea.
The issues remaining are not going to be solved overnight. The NAM noted in our June 30, 2007 press release on the signing of the KORUS that “U.S. auto makers have raised serious concerns with tariff and non-tariff provisions they feel are not adequately addressed and that will continue to block meaningful access to Korea’s auto market. The NAM is encouraging continued discussions to address these legitimate concerns.”
Those discussions have still not taken place, but we are very pleased to see President Obama commit to engaging in talks aimed at resolving this issue by the time of the next G-20 meeting, in Seoul South Korea in early November. We are also pleased to see the President commit to moving the agreement to Congress for consideration in the months after resolution of the issues.