Barriers to green growth

The U.S. government seems poised to regard Korea’s “green growth” policy as a potential stumbling block in trade between the two countries. In the “2010 National Trade Estimate Report on Foreign Trade Barriers” recently submitted to the U.S. Congress, the United States Trade Representative insisted that Korea’s new policy that will increase vehicles’ fuel efficiency as part of the Low Carbon Green Growth Act will serve as a trade barrier unfavorable to U.S. automobile manufacturers. So the USTR is reportedly calling for the Korean government to ease such restrictions. The Presidential Green Growth Committee proposed to raise the average fuel efficiency to 17 kilometers per liter (40 miles per gallon). Under the GGC recommendation, this new regime would be gradually phased in between 2012 and 2015. However, U.S. automobile manufacturers have noted that the GGC’s new proposal would be more stringent than the one in the U.S. which requires car manufacturers to increase fuel efficiency to 14.5 kilometers per liter by 2016, Therefore, the U.S. government thinks the GGC’s new proposal represents a de facto trade barrier for the U.S. automotive industry.

We are deeply concerned that such an unreasonable demand by the U.S. government to protect its car manufacturers will undermine the basis for commercial cooperation between the two parties and have an adverse impact on the future of the Korea-U.S. Free Trade Agreement that is waiting for ratification.

First of all, the Korean government’s green growth policy is not being implemented as a means to raise trade barriers against the U.S.; Korea’s plan to strengthen fuel efficiency for automobiles did not target the U.S. automakers as regulations to increase the efficiency equally apply to vehicles manufactured both at home and abroad. Simply put, they do not discriminate against U.S. automobile manufacturers.

If the U.S. government turns Korea’s green growth policy into trade disputes, it is more likely to run counter to international norms and may breed misunderstanding that the U.S. government attempts to intervene in the implementation of Korean domestic policies in an irrational way. In fact, the Korean government is still at the initial stages of developing a concrete enforcement decree for the new standard. Against this backdrop, it would be unreasonable if the U.S. is demanding to loosen up our new standards at this point.

We sincerely call for the U.S. government to immediately withdraw such an unreasonable request that is against international norms.

The Korean government should also firmly resist any unreasonable demand or pressure by the U.S. when engaging in trade negotiations.