APG - Atlanta Pacific Group

"Connecting Small Business with Asia"

APG Blog

Oct 16 2011

0 Comment

KORUS Ratification Campaign Moves to Seoul

The battle to ratify the long-awaited Korea-United States Free Trade Agreement (KORUS) moved back to Seoul this week as the U.S. Congress approved the treaty on Wednesday. South Korean leaders will now push for approval of the agreement in October by the South Korean National Assembly in hopes of a January 2012 effective date.

The KORUS ratification came amid a formal state visit by Lee Myung-bak, the president of South Korea. The U.S. Senate also ratified the nomination of a new ambassador to South Korea, Sung Kim, on Thursday – just minutes before Myung-bak made a rare speech to a joint session of both houses of Congress.

The U.S. and South Korea have been working towards approval of a free trade agreement since 2006. Early versions of the treaty were revised to address U.S. Democrats’ concerns about labor issues. The agreement (plus two other free trade pacts with Panama and Colombia) passed Congress this week with strong Republican support and few Democratic votes. (All the Senate votes against the agreement were cast by Democrats, who also provided 130 of the 151 “no” votes in the House of Representatives.) President Barack Obama, who has championed KORUS since taking office, formally submitted the latest version of KORUS to Congress only six days before passage – a rare show of Congressional speed and bi-partisan agreement.

State Visit Brings Results

Much of the credit for the speedy approval process was given to this week’s formal state visit by Myung-bak. The visit was also a factor in the Senate approval of Kim, the first Korean-American to serve as U.S. Ambassador to South Korea. Kim, who replaces Pamela Stephenson in the role, is a career U.S. diplomat who was the special U.S. enjoy to six-country talks concerning the nuclear program in North Korea. Republican Sen. Jon Koyl of Arizona had blocked consideration of Kim’s nomination, citing concerns over possible direct U.S.-North Korea negotiations. However, the U.S. State Department convinced Koyl to drop his objections, allowing Kim to be approved while Myung-bak was in Washington D.C.

Myung-bak’s official visit to the United States spanned six days. Obama took Myung-bak to a private dinner on Tuesday night at an upscale Korean restaurant in northern Virginia. The two leaders visited an automotive plant in Michigan on Friday. Obama also hosted a formal state dinner Thursday evening which was attended by such notables as CNN anchor Candy Crowley and Seoul-born actor John Cho, who starred in recent movies including “Star Trek” and the “Harold and Kumar” series. Entertainment included Janelle Monae, the R&B singer from Atlanta, and the Ahn Trio, three sisters born in South Korea and trained as classical musicians at Julliard.

Approval Faces National Assembly Battle

However, once the pomp and circumstance ends, Myung-bak will return to the final battle for KORUS approval in the National Assembly. Hong Joon-pyo, chairman of the ruling Grand National Party (GNP), announced he will seek Korean approval this month. The GNP holds the majority of the Assembly’s 299 seats, making passage of the agreement highly likely.

However, opposition parties led by the Democratic Party (DP) promise to fight the agreement. Small and medium-sized businesses, fisherman, farmers, retailers, and other parties have expressed concern that U.S. goods and services may threaten their future.

KORUS has strong backing from large businesses in both the United States and Korea. The Korea Chamber of Commerce and Industry, the Federation of Korean Industries, and the Korea International Trade Association released statements this week urging the National Assembly to quickly pass KORUS. The groups predicted the agreement would add 350,000 new jobs in South Korea and boost its GNP by 5.6%.

In the U.S., the free trade agreements with South Korea, Panama and Colombia were expected to bump up U.S. exports by more than $12 billion annually and create more than 300,000 jobs. Under KORUS, each country would drop 95% of their tariffs within five years, and most tariffs would be gone in 10 years. The agreement would particularly benefit the agricultural, automotive and manufacturing industries. It is also expected to enhance the export of services from the U.S. to South Korea and bring more direct investments between the two nations.

Georgia’s Expects Benefits from KORUS

KORUS approval would also provide ample new opportunities in Georgia for expanded trade between the state and South Korea. Georgia’s exports to Korea directly support 1,849 jobs, according to the Business Roundtable. The American Farm Bureau estimates that direct agricultural exports from Georgia to Korea would increase by almost $39 million annually under KORUS. More than $6 million would come from the poultry industry alone, which has been hammered by protectionism in some of its major Asian markets. Exports of fruits, vegetables, nuts and processed food products would also increase under the proposed free trade agreements, the Farm Bureau stated. In addition to agriculture, KORUS would provide Georgia and the rest of the United States ample opportunities to expand trade with Korea, which is already the seventh largest trading partner for the U.S.

Concluding KORUS could also be a first step towards more free trade agreements throughout Asia, opening up more opportunities for Georgia and U.S. businesses in the region. “As the first U.S. FTA with a North Asian partner,” the Office of the U.S. Trade Representative stated, “the KORUS FTA could be a model for trade agreements for the rest of the region, and underscore the U.S. commitment to, and engagement in, the Asia Pacific Region.”

Bobby L. Hickman is an Atlanta-based freelance business journalist who regularly contributes to Georgia Trend and other publications. He can be reached through his web site, www.blhickman.com.

back

Add a Comment

  • Please answer the question below: