Can Obama, Lee sell lawmakers on US-South Korea free trade deal?
Just as hopes were fading for the US-South Korea Free Trade Agreement, negotiators came to terms on prying open the South Korean motor vehicle market to placate angry US carmakers and labor unions.
Seoul, South Korea
The controversial Korea-US Free Trade Agreement faces tough hurdles in both South Korea’s National Assembly and the US Congress now that negotiators have forged a compromise firmly endorsed by the presidents of the United States and South Korea.Skip to next paragraph
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Just as hopes were fading for what’s known here by the acronym “KORUS FTA,” negotiators came to terms on prying open the South Korean motor vehicle market, to a carefully limited degree, to placate angry US motor vehicle makers and labor unions.
“I had about given up hope,” says James Rooney, chairman of Market Force, an investing and consulting firm here. “It seemed to me they weren’t going to push it through.”
With the agreement now ready for ratification, says Mr. Rooney, “both countries have so much to gain by closer industrial cooperation” so “let's get on with it and stop the political nonsense."
A daunting task
That may not be easy. President Obama and South Korea’s president, Lee Myung-bak, face the daunting task of convincing legislators in Washington and Seoul to ratify a deal that proponents say would do away with 95 percent of tariffs in five years and increase US exports to South Korea by $10 billion a year.
South Korea's main opposition Democratic Party, for instance, planned a major national campaign against ratification.
Park Jie-won, Democratic Party leader in Korea’s National Assembly, accused the government of having made “too many concessions” on “people’s lives and safety” by easing stringent requirements on motor vehicles.
South Korea’s trade minister, Kim Jong-hoon, however, denied having made too many concessions, calling it a “win win” for both countries.”
Mr. Obama couched the agreement, the biggest US trade deal since the signing of the North American Free Trade Agreement with Canada and Mexico in 1994, as a breakthrough in American efforts to overcome its yawning trade deficit and regain lost respect as a top trading power. With that goal in mind, he said the agreement “shows the US is willing to lead and compete in the global economy” while “opening new markets around the world to products that are made in America."
Mr. Lee, under fire from critics for appearing weak and vacillating in dealing with North Korea’s artillery barrage on a small South Korean island in the Yellow Sea on Nov. 23, said the agreement “lays the groundwork for a 'win-win' relationship by reflecting the national interests of Korea and the United States in a balanced manner."
Both presidents seemed particularly happy since negotiators had failed to come to terms on motor vehicles when Obama was here for the summit of leaders of the Group of 20 (G20) leading economic powers last month.
That failure struck some observers as the death knell of the deal, worked out in 1-1/2 years of grueling negotiations and finally concluded in June 2007.