중앙데일리

A ‘win-win’ compromise breaks FTA deadlock

Dec 06,2010

In the end it was a trade-off between cars and pork that broke the impasse on a revised Korea-U.S. free trade agreement.

For months, the two countries sought to revise the original FTA signed in 2007 in order to win U.S. Congressional support, but Korea was also looking at last-minute concessions of its own to avoid criticism that it was bowing to U.S. pressure.

The final compromise was reached on Friday in Columbia, Md., after four days of negotiations between Korean Trade Minister Kim Jong-hoon and U.S. Trade Representative Ron Kirk.

“To some who say that this was a one-sided concession, I cannot agree because I feel that the agreement was a win-win situation for both countries,” said Kim yesterday as he presented the deal to the media.

The FTA changes focused on auto standards and tariffs, which U.S. lawmakers claimed amounted to unfair trade barriers under the 2007 trade pact.

Under the revised agreement, both countries will eliminate all tariffs for cars in the fifth year after the FTA is ratified. In the meantime, Korea will reduce tariffs on U.S. cars from 8 percent to 4 percent, while the U.S. will maintain the current 2.5 percent tariff.

“South Korean car sales to the U.S. will see limited impact from the revision,” said Kim, explaining that many Korean cars sold in the U.S. are already manufactured there.

In addition, each U.S. automaker will be allowed to export to Korea 25,000 cars a year that meet U.S. safety standards. These cars would be exempt from separate Korean standards that U.S. automakers claimed amounted to a nontariff barrier. U.S. automakers will also be given flexibility in meeting South Korean emissions and environmental requirements.

The U.S. will maintain a 25 percent tariff on truck imports for seven years instead of beginning to phase it out immediately. The earlier agreement called for a gradual phasing out of truck tariffs over nine years. The tariffs will now be cut in the last two years.

In return for Korean concessions on autos, the U.S. agreed that Korea could maintain higher tariffs on U.S. frozen pork products until 2016, when the 25 percent tariff will be eliminated - two years after originally planned. The Korea Swine Association welcomed the move.

The U.S. also agreed to extend L-1 visa validity for Korean workers in the U.S. from the current one year to five years.

In addition, the sale of Korean generic medicine in the U,S, will not be subject to patent or other disputes for three years instead of 18 months. Korea also managed to fend off attempts by the U.S. to allow the import of U.S. beef from cattle older than 30 months to curb the spread of mad cow disease. Kim had repeatedly stated that the beef issue was nonnegotiable because it was not included in the original FTA. Some U.S. lawmakers from western cattle-breeding states had demanded the issue’s inclusion in the FTA to win their support for the trade pact.


By Jung Seung-hyun [seungjung@joongang.co.kr]


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