[Viewpoint] Imbalance? What imbalance?

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[Viewpoint] Imbalance? What imbalance?

When U.S. President Barack Obama made his first visit to Korea last week, no one expected him to say how much he had been looking forward to coming to Seoul, and no one thought that he would insist that ratification of the free trade agreement between Korea and the United States be expedited. Government officials were hoping, if anything, that the Americans would set a timeline to make efforts to ratify the FTA in the first half of 2010.

Instead, Obama mentioned concerns about trade imbalance between the two countries, prompting President Lee Myung-bak to say Korea is willing to listen again if automobiles are an issue in the United States.

If you say you are ready to listen again when the other party makes a demand in a negotiation, you give a completely different nuance as opposed to saying, “There is no room for reconsideration.” Therefore, it was hardly convincing when a government official explained right after the meeting that the president was not suggesting a possible renegotiation.

However, the reality is not so simple in the world of international negotiation. The Korea-U.S. free trade agreement signed in June 2007 has been gathering dust for nearly two and half years because of the lack of political will to overcome the resistance of the automakers and their unions in the United States.

Obama and his advisers have been completely swayed by the unions from the early days of the administration. In order for the Obama administration to get the Korea-U.S. free trade agreement ratified in a Congress dominated by the largely protectionist Democratic Party, Korea certainly needs to give an excuse to President Obama. So it might be a part of Lee’s pragmatic foreign policy to say Seoul was ready to listen to the complaints over the automobile trade.

However, even if Seoul is really ready to listen, we should have made the principles clear. It is unfair for the United States to raise the issue this way for four reasons.

First, it was wrong for Washington to assume that an imbalance in the automobile trade between Korea and the United States exists. Import car sales in the Korean market have been growing constantly, from 4 percent in 2006 to 5 percent in 2007 and then to over 7 percent in 2009. Between 2000 and 2007, the import of German automobiles grew by nine times, and the import of Japanese cars increased by 18-fold. The statistics clearly show that American cars are struggling in Korea not because the Korean market is exclusive and closed but because the American automobiles were not competitive against other foreign cars. When the United States must have the same data, it is hard to understand why Washington blames the exclusiveness of the Korean market to be responsible for the imbalance.

Second, it is high-handed and senseless to demand a renegotiation of an already signed agreement by picking on a trade imbalance in a certain industry. It is against the rules of international negotiation and is not a gentlemanly act. The Korea-U.S. FTA was signed because Seoul and Washington agreed on the negotiation that both parties would benefit equally in the overall agriculture, manufacturing, service and investment sectors. After the agreement was signed, the U.S. delegates rated the negotiation A+. Obama must know very well that it was the same unilateralism that caused worldwide anti-American sentiment.

Third, the negotiation for the Korea-U.S. FTA was done under the fast-track negotiating authority, which was granted to the president by Congress so that the trade agreements signed by the U.S. government and a foreign government would be approved or rejected by the Congress without amendments or filibusters. Based on this premise, Seoul and Washington concluded the negotiation and signed an agreement. It is imprudent and shameful for the United States to reverse the negotiation principle it had defined.

Fourth, the agreement on automobiles in the Korea-U.S. FTA allows American carmakers a sufficient, extensive and preferential approach to the Korean market. The agreement includes measures to make sure the non-tariff barrier does not hinder the import of American automobiles to Korea.

The 8 percent tariff will be exempted, and the accelerated procedure was adopted for the resolution of disputes in the automobile trade. The tax system related to automobiles has been simplified.

Maybe, what President Lee really wanted to say was “It’s your lack of competitiveness, stupid.”

*The writer is dean of the Graduate School of International Studies at Ewha Womans University. Translation by the JoongAng Daily staff.


by Choi Byung-il

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