[VIEWPOINT]Changes in U.S. Congress bode ill for FTA

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[VIEWPOINT]Changes in U.S. Congress bode ill for FTA

The trade-related policies of the United States can change a lot the year after an election. The mid-term elections last November that resulted in victory for the Democrats will, in particular, bring big changes to U.S. trade policies and Korea’s trade with the United States will feel a great deal of its effects. Since the overall atmosphere in Washington has changed to be much more protective of its own trade interests than before, it seems likely that it will become more difficult for the U.S. Congress to pass the Korea-U.S. free trade agreement.
Signs of change in the Congress have already become apparent. Before this month’s opening of the new Congress, the Bush administration had tried to pass a few trade agreements but failed. Last November, President George Bush tried to give Vietnam the status of “a permanent normal trade partner” with the U.S. on the occasion of his visit to the country, but failed to get approval from Congress. He couldn’t get the mandatory two-thirds vote of the members, which is necessary for the passage of the bill, due to objections from Democrats. It was such a great shock to the White House that the New York Times called it “a sign of deep disappointment and discouragement for the White House.” [On Dec. 9, the U.S. Congress belatedly granted Vietnam “permanent normal trade relations,” giving the country the same access to U.S. markets that other WTO members enjoy. On Dec. 30, Mr. Bush signed a proclamation formally extending full U.S.-Vietnam trade ties. Ed., JoongAng Daily]
Ratification of the U.S.-Peru free trade agreement is also being delayed. As multilateral trade negotiations under the umbrella of the World Trade Organization did not make progress, the U.S. administration put all its effort on bilateral negotiations for the conclusion of free trade agreements with other countries. Among six free trade agreement negotiations the U.S. government has pursued accordingly, the U.S.-Peru free trade agreement was concluded first, and its ratification was the highest priority of the U.S. administration.
However, the U.S. government faced an “unexpected” objection to passage of the agreement by the legislature. Congressman Charles B. Rangel, who has been named the chairman of the Committee on Ways and Means of the House of Representatives, and 16 other Democratic Party congressmen demanded re-negotiation of the treaty, saying it should include a stronger clause on labor protection. The U.S.-Colombia free trade agreement, which was dramatically concluded at the end of last year, is also suspended from any further discussion in Congress because the Democrats demand re-negotiation, claiming stronger import safeguards are necessary for its implementation. Such changes in the U.S. Congress are a bad sign for the Korea-U.S. free trade agreement, because the chances that the new Congress will not pass the agreement have increased.
In particular, it seems that the U.S. Congress will probably find it hard to accept the revision of the U.S. anti-dumping law demanded by the Korean side.
The resurgence of trade protectionism also makes the situation more complicated. Among incumbent Republican Congressmen who had supported free trade principles, seven Senators and 28 members of the House of Representatives lost their seats in the last elections. Democratic Party candidates who hold negative views on free trade took their positions. Therefore, the voice of trade protectionism is expected to grow louder in Congress.
Democratic Party congressmen will probably put more emphasis on such issues as protection of workers’ rights, small- and medium-sized businesses and the environment, while opposing the trade policy of the Bush administration that advocates free trade negotiations.
Of course, the U.S. Congress will not allow itself to be bullied by the loud voices of extreme trade protectionists like the trade unions. The leadership of the Democratic Party, including Nancy Pelosi, the first-ever female speaker of the House, and Max Baucus, the new chairman of the powerful Senate Finance Committee, will try to keep the balance by taking the road to moderate trade protectionism.
Although the Democratic leadership leans more toward trade protectionism than the Republican leadership, they have shown a balanced and utilitarian position with regard to pending trade and commerce issues. For example, Ms. Pelosi gave her approval for the Vietnam-related trade bill, despite her party’s official position against it. Also there are quite a few leading Democratic Party congressmen who support bipartisan trade policies.
Not only Democrats but also some Republican congressmen have a strong interest in trade issues related to specific manufacturing industries or businesses, because problems that concern local constituencies will have great influence on election campaigns.
For example, the Levin brothers, Senator Carl Levin and Representative Sandy Levin of Michigan, are expected to raise their voices a little louder when it comes to trade issues related to the auto industry.
In South Korea’s position, it is necessary to prepare for the possibility that U.S. trade policy will turn toward protectionism to a certain degree starting this year.
We especially need to keep in mind that major issues of the free trade negotiations like cars, agricultural products, intellectual property rights and medical products can develop into big controversies due to U.S. policy to protect its domestic industries.

*The writer is a managing partner at Akin, Gump, Strauss, Hauer & Feld in Washington, D.C. Translation by the JoongAng Daily staff.

by Kim Suk-han
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