[Viewpoint] Pushing the FTA to the finish lineThe U.S. Congress will return from its summer recess next week and will be poised to consider the Korea-U.S. (Korus) FTA. The National Assembly is likewise preparing to ratify the deal during its fall session. Until now, political gamesmanship over other issues has kept President Barack Obama from sending implementing legislation to Capitol Hill. The time has come for both countries to clear the final hurdles and ratify the Korus FTA quickly - or risk the loss of a boon to the bilateral relationship.
Notwithstanding widespread agreement among Republicans and Democrats that the Korus FTA will help stimulate exports and job growth in the United States, passage remains mired in partisan bickering over unrelated domestic issues. The key obstacle to ratification in recent months has been the renewal of Trade Adjustment Assistance - a program that assists U.S. workers laid off due to imports.
President Obama seeks to link ratification of the Korus FTA with TAA renewal, but Republicans on Capitol Hill are balking at this political maneuver. Many observers question the wisdom of this use of the Korus FTA as a bargaining chip to improve the prospects for TAA renewal, but the political reality for President Obama is that the Democratic political base, already eyeing Obama’s re-election campaign in 2012, demands it.
There have been other political impediments to the ratification of the FTA in the United States. The recent battles over the government budget and debt ceiling were bitterly fought and produced a hostile political climate. Now, President Obama is preparing to unveil, after the upcoming Labor Day weekend, major new spending initiatives to increase U.S. employment. With unemployment hovering above 9 percent, job creation is now the number one political issue in the country.
However, Republicans and Democrats disagree sharply on how to fix the problem - particularly when it comes to government spending. The upcoming fight over jobs legislation is likely only to exacerbate the existing climate of distrust between the parties on economic matters and will not be conducive to reaching a bipartisan deal to pass the Korus FTA.
Further, the legislative calendar for the next several months is already packed. In the weeks ahead, Congress will take up a number of highly contentious bills, including patent reform, highway funding and renewal of authority for the Federal Aviation Administration. Legislative wrangling over these bills will further distract from the FTA.
Despite these hurdles, the time has come for political leaders in both countries to exercise decisive leadership, disentangle the FTA from other issues and find an expeditious path to ratification. President Obama has already expended great political capital to reshape the Korus FTA as a deal to call his own and to promote its passage. He has described it is a key element of his strategy to create new jobs through expanded trade, and he has sent Ron Kirk, his chief trade negotiator, on a state-by-state tour to promote the deal.
And, there is little question that Korus FTA implementing legislation would secure enough votes on Capitol Hill to pass. Moreover, the business community is clamoring for its passage, and even some unions now support it. Given all that President Obama has put into the success of the FTA, he must now commit to action and get the deal done. If he acts quickly and takes advantage of the current Congressional willingness to consider the deal, ratification within the next two months seems feasible.
As for Korea, its political leaders must rise above the political fray and do what is best for Korea’s long-term national interests. These include, of course, the tangible economic benefits that the Korus FTA would deliver for many of Korea’s key enterprises.
The benefits also include positive ripple effects from the increased trade and investment flows from the United States that the FTA would bring. As U.S. commercial interests in Korea expand, the U.S. commitment to protect those interests in Korea will be stronger, buttressing the bilateral security relationship. At the same time, an enhanced U.S. commercial presence in Korea will strengthen Korea’s hand in dealing with the United States as it will give Korea greater say. In short, as the U.S. stakes in Korea grow, so will Korea’s leverage vis-a-vis the United States.
The FTA is not merely a trade deal. It is essentially a political deal at the highest levels between the two countries that they are committed to deepening their strategic partnership. This enhanced relationship with the United States will also promote Korea’s interests in many ways internationally. Indeed, there is no better way to enhance the bilateral relationship at this time - and for Korea to help itself - than for both countries to finally get on with ratification of Korus FTA.
*The writer is a senior partner specializing in international trade at Akin Gump Strauss Hauer & Feld LLP in Washington, D.C.
By Sukhan Kim