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Resolve Beef and Auto Issues, Then Move on Korean Trade Deal

By | Trade | One Comment

News accounts today reflect determination both by top U.S. and Korean officials that the outstanding auto and beef issues in the U.S.-Korea FTA will be addressed by the Seoul G-20 meeting on Nov. 11 and 12. From the U.S. side, Deputy Assistant to the President and Deputy National Security Advisor for International Economic Affairs and Development Michael Froman said yesterday at a White House press briefing: “We will be putting every effort into achieving an acceptable agreement, a satisfactory agreement by the time the president goes to the G-20.” Mr. Froman also noted that the U.S. negotiators are expending “maximum effort” in order to resolve “all of the issues” related to the KORUS agreement.

Secretary of State Hillary Clinton, in a speech in Honolulu on Oct. 28, noted that the U.S. and Korea “enjoy a vibrant economic relationship, which is why our two Presidents have called for resolving the outstanding issues related to the U.S.-Korea Free Trade Agreement by the time of the G-20 meeting in Seoul.” Secretary Clinton returned to trade later in her speech, noting not only the importance of the KORUS FTA but its key starting role in a larger U.S. pro-trade agenda for 2011 focused on Asia-Pacific.

This messaging is also reflected in today’s Korean press, which are reporting that President Obama and President Lee talked by phone. Korea’s official news agency Yonhap reports “In their telephone talks, the leaders agreed that the FTA ‘should be forged to promote free trade in the world and upgrade the South Korea-U.S. alliance by a notch,’ and that “they agreed to try to reach a compromise before the Seoul G-20 summit from Nov. 11-12.”

It is a very positive sign when very senior officials continue to reiterate their hope and desire to wrap up discussions on the automotive and beef issues still outstanding in the KORUS FTA as the deadline approaches. It is also a good sign that these talks are referred to on both sides as “discussions” rather than “negotiations.” Secretary Clinton’s remarks that put the KORUS agreement at the head of an ambitious trade agenda are heartening. We would suggest that our pending FTAs with Colombia and Panama also be added to that agenda (both border the Pacific Ocean). But this all hinges on finalizing a deal on autos and beef. We encourage both sides to keep moving forward over the next 10 days.

The National Association of Manufacturers has been a strong supporter of the KORUS agreement, but has also always said that more was needed to address the auto industry’s concerns on market access in Korea. We are hopeful that agreement on this is near.

As Korea Trade Agreement Waits, U.S. Influence Ebbs in Asia

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Ambassador Ron Kirk, the U.S. Trade Representative, and his Korean counterpart, Trade Minister Kim, are meeting in San Francisco today to discuss issues surrounding the automotive and beef provisions in the U.S.-Korea free trade agreement. You will recall that this summer, President Obama met with Korean President Lee and announced the two countries would discuss outstanding issues on autos and beef where the U.S. government had some concerns.

President Obama set the November 11-12 2010 G-20 meeting in Seoul as the date by which these discussions should be concluded and an agreement reached for submission to Congress.

So, there’s a lot riding on the meeting today between Kirk and Kim. As I noted yesterday in a Reuters article, no one expects the two Trade Ministers to come to an agreement today – but it’s a great opportunity for them to have an in-depth, frank and open discussion on what needs to be done and how it can be done. This meeting will, if past history is any guide, be followed by additional discussions and meetings, leading up to an agreement that President’s Obama and Lee can at some point around the G-20 meetings.

The National Association of Manufacturers certainly encourages the two Ministers to keep talking and moving forward. This agreement is extremely important to manufacturing in America – Korea is one of our largest trade partners and an key export market for our manufacturing products. Manufactured goods are almost two-thirds of all U.S. exports of goods and services to Korea.  I don’t discount the key importance the agreement has to our agriculture and services sectors, but this is overwhelmingly a manufacturing agreement.

There are clear economic consequences if an agreement cannot be reached. On Monday, U.S.  columnist Doug Bandow of the Cato Institute had a piece, “Korea Pact Essential to the U.S.” published in The Australian newspaper. He started off by noting:

US unemployment remains high. China is ever more confident and has displaced America as the No 1 trading partner with leading East Asian states. How have the Obama administration and Democratic congress responded to these challenges? By retreating economically from Asia. The US-South Korea Free Trade Agreement sits unratified in Washington. This policy was remarkable for both its economic and geostrategic folly.

My emphasis. I should note the Australians are racing toward the finish line of their own bilateral FTA with Korea. Bandow continues: Read More

Preparing for Action on U.S.-Korea Trade

By | Trade | One Comment

From Reuters, “U.S., S.Korea to meet on long-stalled free trade pact“, reporting on today’s meeting in San Francisco between U.S. and Korean trade officials to work on the major issues slowing enactment of a bilateral free trade agreement — notably beef and U.S. auto exports.

Doug Goudie, director of international trade policy at the National Association of Manufacturers, said he did not expect the two sides to announce a deal on Tuesday.

“But I would hope their discussions tomorrow put them a long way down the road toward an agreement on the outstanding issues,” Goudie said.

U.S. Trade Representative Ron Kirk is meeting today with Korean Trade Minister Kim Jong-hoon.

The NAM’s Goudie recently returned from a business delegation’s trip to Korea. His reports are available below:

Earlier posts:

As the U.S. Waits, Other Countries Act on Trade

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A nice summary by the National Center for Policy Analysis, “Trade Action — Or Inaction: The Cost for American Workers and Companies.” Excerpt:

The United States has completed negotiations of three free trade agreements (FTAs) that await Congressional approval of implementing legislation. The United States signed FTAs with Colombia on November 22, 2006, with Panama on June 28, 2007, and with Korea on June 30, 2007. Congress has not yet taken up any of these agreements.

Other major trading partners are also in the process of negotiating FTAs with Colombia and Korea:

  • Canada completed negotiation of an FTA with Colombia and submitted it on March 26, 2009, for approval by the Canadian House of Commons.
  • Canada completed negotiations of an FTA with Panama on August 11, 2009.
  • The European Union (EU) and Korea concluded negotiations on July 14, 2009, for a comprehensive FTA that is expected to be signed in late 2009 and implemented in 2010.

The European Union has held several negotiating rounds for a free trade agreement with Colombia that may also include Peru and Ecuador.

Meanwhile, “Colombia Accepts Canadian Beef Of All Ages.”

As for South Korea, the National Association of Manufacturers did submit a comment letter to the U.S. Trade Representative’s office expressing strong support for the U.S.-Korea FTA while noting that NAM member companies had raised serious objections to Korea’s non-tariff barriers and its handling of vehicles and automotive products.