Keep the FTA intactUnited States Trade Representative-nominee Ron Kirk indicated recently that the Barack Obama administration is inclined to renew trade talks with Korea because it cannot accept the terms of the free trade agreement the Bush administration struck with Seoul.
In his Senate confirmation hearing, Kirk said he agreed with Obama that the bilateral trade accord “simply isn’t fair” and that Washington would walk away from the pact “if we don’t get that right.” Also during the hearing, Senate Finance Committee Chairman Max Baucus advised Kirk to find a way to get Seoul to lift the ban on U.S. beef imports regardless of age. Taken together, these remarks suggest Washington may try to link Korea’s beef barriers to legislative ratification of the Korea?U.S. FTA despite the fact that it was signed last year.
We believe the trade settlement was successful and equitable, and that it is beneficial to both countries. After all, how reliable and valid would an international trade deal be if it were modified every time a new administration came in?
The Obama administration can of course propose additional talks in contentious areas such as automobiles. But expunging the current trade framework to replace it with a new one is out of the question, and the two sides should leave it untouched. New negotiations should be limited only to modification and attachments for exceptional cases. It is well known that Obama disapproves of the current terms for automobile imports, and we too are well aware of the fact that American automakers are teetering on the edge of an abyss.
But the imbalance in auto sales between the two countries is at its core the result of competition and therefore cannot be an issue to be solved through a trade agreement. Restrictions on U.S. beef imports should also be dealt with outside of FTA negotiations.
Seoul should keep a close watch on Washington’s oft-repeated mantra on renegotiating the FTA and focus on keeping the original agreement intact. It should also prepare for the possibility that additional negotiations will be necessary before the FTA is ready for ratification. If additional negotiations are necessary, then we must be more assertive. We should demand a relaxation of regulations on intellectual property rights and health care to maintain balance in the deal.
The Obama administration is touting the significance of free and vigorous trade. We hope its commitment to that does not waver with the deepening of the current economic slump.