As doubts grow, Choi says FTA not being rushed

Choi Seok-young, the deputy trade minister, dismissed speculation yesterday that the long-stalled Korea-U.S. free trade agreement was being hastily implemented due to political wrangling in Korea over the deal and legislative elections in April.

Agreement was reached on Tuesday to make the FTA effective as of March 15.

Choi, who arrived in Seoul yesterday after conducting a final meeting in Seattle with his U.S. counterpart, Assistant United States Trade Representative Wendy Cutler, stressed that the two sides were not rushing to get the ball rolling on the deal.

The date was selected “to give businesses in both countries sufficient time to prepare for the production, transportation and distribution of their goods,” he said at the government complex in Gwanghwamun, central Seoul.

“[We both] initially planned to implement the trade deal immediately after the final details were checked, but we agreed that March 1 would be too early and April 1 too late,” he said.

He added that the U.S. had not commented on the main opposition Democratic United Party’s threat to scrap the deal should it gain power in December’s presidential elections, amid its calls for the deal to be renegotiated. In conjunction with the Unified Progressive Party, they sent a strongly worded letter to U.S. President Barack Obama earlier this month to that effect, but have subsequently toned down their rhetoric.

The deputy minister said the Korean government and public have suffered due to continued conflict over the deal for more than six years.

“The recent controversy threatening [it] is unproductive and could put a dent in the international community’s confidence in Korea,” he said.

He said it is time for political and business communities to cooperate to make full use of the FTA with the world’s largest market, adding that the government will work to make sure local consumers reap the rewards.

U.S. Trade Representative Ron Kirk also hailed the announcement yesterday, saying the deal will strengthen Washington’s economic partnership with Seoul.

“Entry into force of this agreement will open up Korea’s $1 trillion economy for America’s workers, businesses, farmers and ranchers, while also strengthening our economic partnership with a key Asia-Pacific ally,” Kirk said in a statement.

The final checking process dealt with around 350 questions related to clauses in the agreement, Choi said.

“As each country has the right to interpret clauses in their own way, we talked about some of the provisions that the two countries interpret differently,” Choi said. These include the determination of pharmaceutical drug prices and tariff exemptions on small parcels below $200, among other issues.

The deputy minister said that he had “maintained our current stance on these issues.”

With the deal due to take effect next month, Korea becomes the only Asian country to have signed free trade pacts with the world’s two biggest economies, the U.S. and the European Union. It will have taken five years and nine months to enact the deal with the U.S. since negotiations began in June 2006. The FTA with the EU went into effect on July 1 of last year.

Korea has signed eight free trade deals with a total of 45 countries. It is now negotiating with 12 more nations to strengthen economic ties.

However, as the Korea-EU FTA enters its eighth month, consumers are questioning what benefits it has brought. They have also expressed doubts about the deal with the U.S., despite reports from the government and state-run think tanks arguing that it has already played an important role in protecting the Korean economy and trade from the global financial crisis in recent months.

But data from discount store Lotte Mart suggests many prices have been little affected by the deal, particularly French cheese and wine.

“Consumers say they feel no effects of the price cuts, because tariffs on food from Europe are planned to be lifted gradually over the next three to five years,” a Lotte official said.

Korean consumers are not impressed by the EU deal as tariffs on food and cosmetics have not yet been lifted, said an official at the trade ministry. “Let’s not be hasty. It is not right to say the FTA has had no effect just because we don’t see immediate differences in prices,” he said.

By Song Su-hyun [ssh@joongang.co.kr]