United States–Korea Free Trade Agreement

United States–Korea Free Trade Agreement
Hangul 한·미 자유 무역 협정
Hanja 韓美自由貿易協定
Revised Romanization Han-Mi jayu muyeok hyeopjeong
McCune–Reischauer Han-Mi chayu muyŏk hyŏpchŏng

The United States–Korea Free Trade Agreement (officially: Free trade agreement between the United States of America and the Republic of Korea),[1] also known as KORUS FTA,[2] is a trade agreement between the United States and the Republic of Korea. Negotiations were announced on February 2, 2006, and concluded on April 1, 2007. The treaty was first signed on June 30, 2007, with a renegotiated version signed in early December 2010.[3][4]

The agreement was ratified by the United States on October 12, 2011, with the Senate passing it 83–15[5] and the House 278-151.[6] It was ratified by the National Assembly of South Korea on November 22, 2011, with a vote of 151–7, with 12 abstentions.[7] The agreement entered into effect in March 2012.[8]

The trade agreement involves an estimated 362 million consumers in the United States and the Republic of Korea. The treaty's provisions eliminate 95% of each nation's tariffs on goods within five years, and create new protections for multinational financial services and other firms.[4] For the United States, the treaty was the first free trade agreement (FTA) with a major Asian economy and the largest trade deal since the North American Free Trade Agreement (NAFTA) in 1993. For South Korea, the KORUS FTA is second in size only to the FTA signed with the European Union[9] and dwarfs recent FTAs signed with Chile, Singapore, the European Free Trade Area and the Association of Southeast Asian Nations (ASEAN).[10]

History

While the treaty was signed on June 30, 2007, ratification was slowed when President George W. Bush's fast-track trade authority expired and a Democratic Party-controlled Congress expressed objections to the treaty related to concerns over bilateral trade in automobiles and U.S. beef exports. Nearly three years later, on June 26, 2010, President Barack Obama and President Lee Myung-bak expressed renewed commitment to the treaty, stating that they would direct their governments to resolve remaining obstacles to the agreement by November 2010.[11]

After discussions at the November 2010 G-20 Seoul summit and further negotiations in December 2010 in Maryland, Presidents Obama and Lee announced on December 4, 2010, that a deal had been reached; they subsequently signed an updated version of the agreement.[4][12][13][14][15] On March 15, 2012, the agreement entered into effect.[8]

2008–11

2008

Soon after being signed by the US President George W. Bush and his South Korean counterpart, Roh Moo-hyun, rumors spread of a possible renegotiation of the text, citing possible opposition by the U.S. Democrats. However, Kim Jong-Hoon, South Korea's chief negotiator for the 10-month talks that brought the FTA, denied such rumors assuring journalists that "The deal has been done and that's it. There will be no renegotiations." Kim's comment came after his American counterpart, Wendy Cutler, the assistant US trade representative for Japan, Korea and APEC Affairs and chief negotiator of the KORUS FTA negotiations, indicated that the Democrats may demand amendments in the labor area.[16]

On September 16, 2008, U.S. Commerce Secretary Carlos Gutierrez asked the U.S Congress to ratify the Korea-U.S. free trade treaty as soon as possible, arguing that "trade creates more jobs and boosts economic growth". He called on the U.S. Congress to swiftly approve pending trade deals with Colombia and Panama.[17]

The Grand National Party (GNP) was at the same time weighing pros and cons of the National Assembly’s ratification of the agreement. At a meeting of its top council held October 2, 2008, at GNP headquarters in Yeouido, GNP leadership expressed divergent opinions. GNP chairman Park Hee-tae and supreme council member Chung Mong-joon sided with the argument for circumspection. Park said it was first necessary to establish a plan for farmers and fishermen negatively affected by the signing of the agreement. He suggested looking at the government’s countermeasures, then discussing passage of the FTA. But leaders within the National Assembly of South Korea argued for a quick resolution. Floor leader Hong Joon-pyo is reported to have said that the United States could propose renegotiations in the area of automobiles, which they felt was disadvantageous to the U.S. auto industry. He stated this could be done following the U.S. election, but that it was necessary to ratify the FTA before then.[18]

On October 1, 2008, a South Korean trade official declared that ratification was unlikely within the year given the U.S. political climate.[19][20] On October 2, 2008, South Korea completed all procedures for parliamentary ratification. The trade bill was submitted to the National Assembly.[21] The Korean ambassador to the United States, Lee Tae-shik, met with U.S. Congressmen more than 300 times to persuade them to ratify the FTA, which was facing objection from Democrats, who held a majority in both the House of Representatives and the Senate.[22]

U.S. presidential election

During the 2008 U.S. presidential election, both John McCain of the Republican Party and Barack Obama of the Democratic Party expressed commitment to a U.S.–Korea alliance.

However, the Democratic Party expressed anxiety about globalization and renewed doubts about trade liberalization, which it argued could jeopardize the Korea-U.S. Free Trade Agreement, which had yet to be ratified. Then-presidential-candidate Barack Obama opposed the KORUS FTA as "badly flawed" during his campaign, claiming it wouldn't do enough to increase U.S. auto sales. His criticism echoed the auto labor unions.[23] Presidential Candidate and then-Senator Obama said he would vote against the FTA if it came to the floor of the U.S. Senate. He also stated he would send it back to Korea if elected president.

Obama had expressed similar negative feelings about the North American Free Trade Agreement between the U.S., Canada and Mexico, threatening during February 2008 campaign stops in industrial states to unilaterally "opt out" of the three-nation agreement. News outlets later reported that his senior economic advisor Austan Goolsbee assured Canadian officials in a private meeting on February 9 that Obama's rhetoric was "more reflective of political maneuvering than policy".[24]

The Republican Party pointed to a $20 billion increase in annual bilateral trade as evidence that both countries would benefit economically from lowering trade barriers, citing the Korea-U.S. trade deal as an example of the rewards of free trade in an era of growing economic globalization.

During the last half of 2008, U.S. officials expressed confidence that the trade deal would be approved after the November 4 election.[19]

December 2010 agreement

The December 2010 agreement represented a compromise between the two sides. Significant concessions were granted to the United States on trade in automobiles: tariff reductions for Korean automobiles were delayed for five years, and U.S. autos were granted broader access to the Korean market. At the same time, the negotiators agreed to set aside disagreements over U.S. beef exports for the time being.

The deal was supported by Ford Motor Company, as well as the United Auto Workers, both of which had previously opposed the agreement. Remarking on the UAW's support, an Obama administration official was quoted as saying, "It has been a long time since a union supported a trade agreement" and thus the administration hopes for a "big, broad bipartisan vote" in the U.S. Congress in 2011.[15] At the time of its December 2010 announcement, the White House also published a collection of statements from a wide range of elected officials (Democrats and Republicans), business leaders, and advocacy groups expressing support for the KORUS FTA.[25]

2011 developments

After the opposition party backtracked on their agreement to negotiate the FTA, to a more hardline stance, The ruling Grand National Party could potentially ratify the FTA alone in the parliament.[26]

Seoul wanted products made by South Korean companies in the Kaesong Industrial Region in North Korea included in the deal; Washington did not. The disagreement is unresolved but was not allowed to scupper the deal, which allows for further talks on the subject.[10]

The Seoul Administrative Court has officially decided to release approximately 300 translation errors of the free trade agreement-related documents to public on December 2, 2011.[27]

Lee Jeong-ryeol (이정렬), the chief prosecuting attorney at the Changwon District Court in Gyeongsangnamdo criticized the FTA on his Facebook account, prompting concern from the judicial scene.[28]

There is a judicial movement to establish a special task group to speculate of a possible renegotiation of the agreement.[29][30]

Developments from 2016

During the United States presidential campaign of 2016, Republican candidate Donald Trump described the United States–Korea Free Trade Agreement as a "job-killing trade deal".[31][32]

On April 27, 2017, President Trump announced his intention to renegotiate or terminate the treaty, describing it as a "one-way street" and "a Hillary Clinton disaster, a deal that should've never been made", characterizing the resulting situation as "We’re getting destroyed in Korea" [33] and that "It's a horrible deal, and we are going to renegotiate that deal or terminate it."[34]

According to Trump, "We’ve told them that we’ll either terminate or negotiate; we may terminate", although South Korea's Ministry of Trade claimed not have been notified of any trade renegotiation request at that time.[33]

United States reactions

Opponents

Opponents make the following arguments:

President Obama makes last-minute edits to a speech announcing the KORUS FTA on December 4, 2010.

Advocates

Advocates make the following arguments:

South Korea reactions

As it does in the United States, the FTA proves a highly divisive issue in Korea. Opposition arguments tend to focus on perceived disparities in the agreement as well as public opinion. Advocates tend to focus on economic predictions.

Opponents

Advocates

Effects

See also

References

  1. "Preamble: Free Trade Agreement Between the United States of America and the Republic of Korea" (PDF). Office of the United States Trade Representative. Retrieved 18 May 2016.
  2. "New Opportunities for U.S. Exporters Under the U.S.–Korea Trade Agreement". Office of the United States Trade Representative. Retrieved 18 May 2016.
  3. "United States and the Republic of Korea Sign Landmark Free Trade Agreement". Archived from the original on May 27, 2008. Retrieved 2008-06-18.
  4. 1 2 3 "US, South Korea sign sweeping free-trade agreement". Agence France-Presse. December 5, 2010.
  5. "Archived copy". Archived from the original on December 14, 2011. Retrieved October 13, 2011.
  6. Liberto, Jennifer (2011-10-12). "Congress passes trade deals". CNN.
  7. https://fas.org/sgp/crs/row/R41481.pdf
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  12. President Barack Obama, "Remarks by the President at the Announcement of a U.S.–Korea Free Trade Agreement," The White House Office of the Press Secretary, December 04, 2010
  13. Kim, Yeonhee (Dec 4, 2010). "U.S. and South Korea welcome long-awaited trade deal". Reuters.
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