United States, South Korea Conclude Free-Trade Agreement
USINFO Staff Writer
Washington - The United States has concluded a free-trade agreement (FTA) with the Republic of Korea, making it the latest such agreement reached under the president's trade-promotion authority (TPA), the Office of the U.S. Trade Representative (USTR) announced April 2.
The agreement was concluded April 1, the last day TPA allows the president to submit free-trade agreements to Congress for an up or down vote, without amendments. Congress will have 90 days to consider the agreement before trade-promotion authority expires on June 30.
With the pending expiration of TPA, also called fast-track authority, the United States does not plan to start any new FTA negotiations, said Sean McCormack, state department spokesman.
Fast-track authority was granted to President Bush in 2001, when the House of Representatives was controlled by Republicans. With Democrats now in control in Congress, renewal of TPA is uncertain.
The Korea FTA is the "most commercially significant" free-trade agreement the United States has reached in more than 10 years, or since the North American Free Trade Agreement (NAFTA), according to a USTR press release.
The negotiations that led to the U.S.-Korea FTA demonstrate "that two countries with large, complex and dynamic economies, and a tradition of robust public involvement can work through challenges and craft a high-quality free trade agreement," said Deputy U.S. Trade Representative Karan Bhatia.
South Korea is the world's 10th-largest economy and the United States' seventh-largest trading partner. The United States is Korea's third-largest market. Two-way trade in goods between the two countries carried an estimated value of $72 billion in 2006, USTR said.
When implemented, the United States-Korea Free Trade Agreement (KORUS FTA) would expand trade and investment flows between the two countries across a comprehensive list of economic sectors including agriculture, industrial and consumer products, automobiles and textiles, USTR said.
The agreement also would further enhance the U.S.-Korea partnership that has been "a force for stability and prosperity in Asia," President Bush said in an April 2 statement.
U.S. business groups have urged swift adoption of a U.S.-Korea FTA, which had been in negotiations for 10 months.
Under the agreement, more than $1 billion worth of U.S. farm exports to Korea would become duty-free immediately and most remaining agricultural tariffs would be phased out over the first 10 years after the agreement is enacted.
More than 90 percent of bilateral trade in industrial and consumer goods would become duty-free in three years after enactment with remaining tariffs eliminated within 10 years, USTR said.
The agreement would eliminate Korea's engine displacement-based tax system for imported cars. The United States says that system discriminates against U.S.-made autos, which generally are larger than domestically produced Korean cars.
The pact also would ensure that U.S. investors in Korea have the same rights as Korean investors and that intellectual property rights (IPR) are protected.
It would require both the United States and Korea to enforce their environmental and labor laws and would establish mechanisms for enhancing cooperation in safeguarding labor rights and environmental protections.
The full texts of a press release announcing the agreement and Bhatia's prepared remarks are available on the USTR Web site. Bush's letter to Congress concerning the agreement is available on the White House Web site.