There are significant changes must made order for free

June 29th, 2010|Sasha James
State

There are significant changes that must be made in order for this free trade agreement to gain broad congressional support, Representative Louise Slaughter, a leader of trade-wary Democrats warned on Monday in a statement.

Obama, after a meeting with South Korean President Lee Myung-bak on Saturday, said he wanted to resolve problems blocking the trade deal by the time Lee hosts the next Group of 20 leaders summit on Nov 10-11 in Seoul.

In a few months following that, I intend to present it to Congress, Obama said at a G20 meeting in Toronto.

It was the first time Obama laid out a clear timeframe for action on the pact, which the United States and South Korea signed three years ago this Wednesday during the administration of former President George W. Bush.

It has been stalled since Obama took office, along with two other Bush trade deals with Panama and Colombia, because of strong resistance from many Democrats such as House Ways and Means Committee Chairman Sander Levin, a Michigan Democrat.

Much of the opposition is rooted in fear the agreement will open the U.S. market to more South Korean cars and endanger the jobs of U.S. autoworkers who tend to vote Democratic.

South Korea exported around 500,000 autos to the United States in 2009 but imported only about 6,000 U.S. autos, which critics say is evidence of its largely closed market.

U.S. trade officials say South Korean restrictions on U.S. beef are the other main obstacle blocking the pact.

However, opponents of the trade deal say changes are needed throughout the agreement in areas ranging from financial services to the investment provisions.

AFL-CIO President Richard Trumka warned that the giant labor federation would strongly oppose passage of the trade agreement unless its concerns are addressed.

Our negotiators should go back to the table to address the imbalanced market-access provisions in the agreement and to revisit the flawed investment, Trumka said in a statement.

U.S. Trade Representative Ron Kirk said South Korean Trade Minister Kim Jong-hoon have agreed to talk in early July about a timetable for negotiations, a spokeswoman for Kirk said.

U.S. trade officials are consulting with lawmakers and other interested parties as they work on proposals to give the South Koreans, the spokeswoman said.

Representative Phil Hare, an Illinois Democrat, said approving even a modified trade deal with South Korea was too risky for the bailed out U.S. auto sector.

Americas auto industry and workforce are finally back on their feet. This trade agreement, even if it is retooled, would knock them down again, Hare said.

The pact currently requires the United States to immediately eliminate a 2.5 percent tariff on most South Korean cars and to phase out a 25 percent tariff on South Korean pickup trucks over ten years.

South Korea would immediately eliminate an 8 percent tariff on U.S. cars and a 10 percent tariff on pickup trucks.

However, critics say the pact does not adequately address a number of non-tariff barriers that South Korea has long used to keep U.S. cars out of its market.

Steve Collins, president of the American Automotive Policy Councils, said U.S. automakers wanted a results-oriented trade deal ensuring they make additional sales in the South Korean market in exchange for U.S. tariff cuts.

A well-negotiated U.S.-Korea Free Trade agreement represents the last, best chance to open the Korean market to imported automobiles, Ford Motor Co. said in a statement on Monday.

Reporting by Doug Palmer Editing by Cynthia Osterman source