Text Fwd: U.S. likely to push amendments to KORUS FTA auto provisions

'President Lee Myung-bak, left, meets with U.S. President Barack Obama at the Intercontinental Hotel in Toronto, Canada, June 28.'

Hankyoreh
U.S. likely to push amendments to KORUS FTA auto provisions S.Korea has publicly stated their opposition to altering the KORUS FTA, but now seems open to additional talks
July 9, 2010
By Kwon Tae-ho

After announcing plans to pursue Congressional ratification of the South Korea-U.S. Free Trade Agreement (KORUS FTA), the United States strongly hinted that it would be asking for amendments to the automobile provisions in the existing agreement.

“We have concerns about some of the auto provisions in the South Korean free trade agreement that was submitted by the Bush administration” said White House Press Secretary Robert Gibbs during a briefing Wednesday (local time). “One of the reasons we still see outstanding issues is because of some of the auto provisions.”

Gibbs added that the U.S. discussed the issue with South Korea at the G-20 summit in Toronto and said that President Barack Obama hopes it will be resolved prior to his trip to Seoul to attend the G-20 summit in November.

Analysts have interpreted this as an outward expression of the Obama administration’s desire to engage in additional KORUS FTA discussions with South Korea to extract amendments in the area of automobiles that can be used for the November mid-term elections. In his briefing Wednesday, Gibbs did not conceal the fact that a Congressional ratification would be unlikely without amendments in the automobile sector.

“The process cannot play itself out until outstanding issues are resolved.” Said Gibbs.

Gibbs did not make any particular reference to the beef issue Wednesday.

It was also reported that in a White House speech the same day, President Obama said that the KORUS FTA would create new jobs and opportunities for citizens of both countries. Obama also ordered the beginning of negotiations to address unresolved points with the agreement prior to his November visit to South Korea.

The problem lies with the vagueness of the concept of “non-tariff barriers,” which the U.S. frequently cites as a problem with the South Korean automobile market. The U.S. industry is well aware that there are several factors behind the failure of U.S. cars to sell well in South Korea, and that the present situation is unlikely to change a great deal simply through amendments to the agreement. The fact that the United States did not state any specific demands also appears to be connected with this.

Meanwhile, the Lee Myung-bak administration, despite having repeatedly stressed its position that there will be “no additional negotiations,” has begun showing signs that it may engage in additional discussions if the U.S. requests them.

“There was no specific reference from the U.S. as to what area of the KORUS FTA provisions contained problems,” said an official with the Ministry of Trade. “If an opinion is communicated from the U.S., we could engage in discussions.” However, the official said, “Our basic position is that there are no problems with the automobile provisions.”

Please direct questions or comments to [englishhani@hani.co.kr]