Korea won`t budge on U.S. FTA: official

Korea "will not and cannot accept" any request by the U.S. government to revise the bilateral free trade agreement signed in June 2007, an official at the Ministry for Foreign Affairs and Trade in Seoul said yesterday.

"Any kind of revision through any kind of additional negotiations to the already sealed deal is not possible," a Trade Ministry official told The Korea Herald on the condition of anonymity as he is not authorized to speak to the media.

"We cannot change our basic position."

The official stressed that the U.S. government has not sent an official request for revision talks, and such a request would break the terms of the agreement and the international norms.

The ministry official made the remarks following comments by U.S. Trade Representative Ron Kirk on Thursday that Korea must make more efforts to further open up its auto and beef markets.



"Our market is open to Korean autos. All we are asking for is for our own auto companies to be able to compete on a level playing field in the Korean market," Kirk said in a speech to the U.S.-Korea Business Council in Washington.

The U.S. policymaker expressed Washington`s will to reach a compromise, while noting his scheduled meeting with Korea`s Trade Minister Kim Jong-hoon next week in Singapore.

"We believe that a level field is possible and within reach. And we are now developing proposals that will enable us to address concerns with respect to automotive trade. We are also looking at concerns with respect to beef and non-tariff measures more broadly to see how they can be addressed most effectively," Kirk said.

His comments come before Obama`s visit to Asia this month, during which he is scheduled to meet with Korean President Lee Myung-bak.

The U.S. auto and beef industries have been particularly sensitive and resistant towards the trade accord, criticizing it as "unfair and imbalanced."

U.S. supporters of the deal, however, emphasize the dangers of sacrificing an overall favorable deal for U.S. businesses and the economy at the expense of catering to weakened industries in urgent need of rebuilding their global market competitiveness.

The United States also risks losing its clout in Asia`s fourth-largest economy, as Korea and the European Union are projected to ratify their comprehensive FTA deal as soon as July or August next year.

For the United States, its FTA with Korea would be largest since the North American Free Trade Agreement took effect with Canada and Mexico in 1994.

"The benefits of the Korea-U.S. FTA are balanced for both sides, and the deal as it stands now reflects the needs and interests of the industries that are now feeling anxious," the Korean Trade Ministry official said.

Experts say the sensitive nature of the current economic conditions is pressuring the U.S. government to empathize with and act cautiously towards the delicate industries.

They also note that Washington needs to acknowledge that they risk losing an important deal that is generally mutually beneficial.

"Not every industry in both countries can be satisfied; we also have critical industries too," the ministry official stressed.

Suh Jin-kyo, an economist at the Korea Institute for International Economic Policy, said Washington`s FTA issues are mostly domestic, rather than bilateral.

"The weakness of the U.S. auto and beef markets is a domestic one, and a challenge that needs to be resolved domestically; so the U.S. government should think of policy measures to revive these sectors," Suh told The Korea Herald.

The economist noted that the deal is significant enough for the U.S. government to know that its benefits far outweigh the losses.



He added that another reason for the U.S. resistance could be the relatively weak social safety net compared to member countries of the European Union.

"I don`t think it is right for the U.S. to react the way it is, to the point of breaching protocol, just because of a small part of the overall large trade deal," Suh said.

Kim Do-hoon, an economist at the Korea Institute for Industrial Economics and Trade, also echoed the view that the current FTA deal addresses all the U.S. concerns.

On the notion of revising the accord on the pretext of the changed global economic environment, the Seoul trade ministry official said terms of trade deals cover a time span of between five to 20 years. He also added that FTAs also contain a "special clause for revision" to give them flexibility to respond to circumstantial changes.

"But this is a clause possible only after ratification," the official stressed, noting FTA revisions being considered between Korea and Chile. "Any call by the U.S. to change the already sealed deal would be like breaking a promise."

Seoul is hoping for U.S. congressional approval of the FTA by the end of June.

Korea`s ambassador to the United States Han Duk-soo said on Wednesday that Seoul is worried that the November 2010 congressional elections could delay action on the pact until 2011 at the earliest. (sohjung@heraldm.com)



By Yoo Soh-jung