Obama pushes Korea to do its fair share on FTAU.S. President Barack Obama pressed Korea to work harder to make the Korea-U.S. Free Trade Agreement a fairer game, linking the matter with Korea joining the Trans-Pacific Partnership.
Obama’s remarks at a roundtable with business leaders Saturday in Seoul represented the growing discontent of U.S. industries with the two-year-old agreement, which was hailed as one of the most important bilateral trade pacts for both sides when it was signed in 2007 and revised in 2010.
“We still have some more work to do to fully implement the trade agreement and make sure that we’re maximizing its benefits, that our companies can compete fairly in areas like autos and IT and organic foods,” Obama said at the breakfast meeting hosted by Amcham Korea.
“And given South Korea’s interest in the Trans-Pacific Partnership, fully implementing Korus [the Korea-U.S. FTA] also is the single most important step that South Korea can take now to show that it’s prepared to eventually meet the high standards of the TPP.”
Discontent has risen in the United States over the widening trade deficit with Korea since the FTA took effect in March 2012.
According to The Wall Street Journal, Korea’s trade surplus with the United States climbed to $17 billion in the first year after the agreement took effect and $20 billion in the second.
Tami Overby, vice president for Asia at the U.S. Chamber of Commerce and former president of Amcham Korea, told reporters in Washington earlier this month that Korea needs to fully implement the pact in areas viewed by the United States as favoring the Korean side, such as automobiles, finance, pharmaceuticals and medical devices. She said those issues would be raised during Obama’s two-day visit to Seoul, which included a summit with President Park Geun-hye.
Obama told business leaders that he discussed the full implementation of the agreement with Park on Friday night. “We both agreed that these are issues we can work through together,” he said.
According to the Institute for International Trade under the Korea International Trade Association, much of U.S. business discontent is directed at nontariff barriers in Korea, such as regulatory policies related to industries addressed by the Korus FTA.
The Park administration has not announced that it will participate in the 12-nation TPP deal, but its attitude toward the pact - which will cover about 40 percent of the global economy - is a far cry from its initial indifference.
Obama said the FTA is still “a win-win” and the two countries are in “one of the key economic relationships of the 21st century.”
According to the Blue House, Korea’s trade deficit in its services account with the United States was $11.7 billion in 2012.
Korea’s investment in the United States last year was $5.3 billion compared to U.S. investment in Korea of $3.5 billion. Obama encouraged Korean businesses to invest more. “I just want to remind companies around the world that if you are looking for a great place to set up shop, come to the United States,” he said.
Meanwhile, the two presidents agreed on strengthening cooperation in the energy sector, particularly shale gas and gas hydrates, the Blue House said yesterday. The United States produces 93 percent of the world’s shale gas and expects shale gas to supply 60 percent of its energy needs by 2035. Korea, which depends on foreign sources for 96 percent of its energy needs, plans to import shale gas starting in 2017.
According to the U.S. Geological Survey, there are an estimated 10 trillion tons of gas hydrate reserves in the world. That compares with 280 billion tons of natural gas and 150 billion tons of shale gas reserves.
Gas hydrates are naturally occurring ice-like deep sea substances composed of gas molecules.
The United States is known to have the most advanced technologies for developing gas hydrates. Korea has worked with the United States to develop hydrate technologies since 2008.
During the summit, the two countries also agreed to strengthen cooperation in information and communications technology and hold a follow-up meeting to the Korea-U.S. ICT Policy Forum, which met for the first time in November in Washington.
BY MOON GWANG-LIP [firstname.lastname@example.org]