No renegotiation of the FTA

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No renegotiation of the FTA

President Lee Myung-bak said he’d be willing to talk about automobiles in the Korea-U.S. free trade agreement if there are any problems there. That’s not surprising. But Lee’s words left room for some misunderstanding and some foreign news agencies reported that Korea had taken a 180-degree turn on its previous stance. The Democratic Party and other opposition sectors criticized the government for giving in to the U.S. request for renegotiations. But Lee more than likely referred to additional negotiations, which would entail revising supplementary documents through extra discussions.

The Korea-U.S. FTA agreement runs over a thousand pages. Renegotiating only the automobiles part would break the balance of benefits for both sides. And it’s difficult to find any precedent where countries fixed their already-agreed-upon FTA pacts. And once the renegotiation is under way, Korea could raise complaints on intellectual property rights and medicine. When the balance that was achieved through a packaged settlement is endangered, then the Korea-U.S. FTA will be all but wiped out. Renegotiation is not right, nor is it possible.

The U.S. discontent with the automobiles section is understandable. Last year, the United States sold 8,864 vehicles in Korea, but Korea’s Hyundai-Kia Motors sold about 53,000 cars in the U.S. in October alone. Of course, it’s not all because of systematic problems, such as tariffs. The essence of the problem is that the U.S. cars are no longer competitive. It’s easy to see that when you consider the European Union exports 50,000 cars a year to Korea under the same conditions. The United States has never presented any benchmark for review of the FTA or made any specific requests. Revision to the taxation on cars with large engine displacements and other U.S. demands are already included in the current agreement. But U.S. auto unions and some members of Congress are constantly raising issue with the deal. They keep saying they won’t accept the Korea-U.S. FTA in its current form.

When Lee said he was ready to listen, he may have tried to quell any doubts surrounding the agreement. Fortunately, U.S. President Barack Obama responded that he’d acquired a tool to persuade Congress once he returns home.

Foreign Minister Yu Myung-hwan was busy fending off speculation about renegotiation, saying it would never take place. But it’s time the two countries got past defensive postures and tried to solve problems creatively and diplomatically. As we witnessed during the candlelight vigils last year, any Korea-U.S. deal can be incendiary. It’d be wise to leave the agreement itself untouched and then revise annexed documents, exchange side letters or reach pacts between industries in order to resolve the automobile issue. And both sides must never insert any toxic clause that could provoke the people of their own countries.
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