Early ratification of KORUS FTA to help overcome economic downturn: ministry

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By Park Sang-soo
SEOUL, June 30 (Yonhap) -- South Korea's finance ministry said Tuesday that an
early ratification of a pending free trade deal with the United States is
important in helping Asia's fourth-largest economy overcome the current economic
slump.
In a report, the ministry said the government needs to complete domestic
procedures for parliamentary approval of the trade deal, signed exactly two years
ago. "We also need to persuade the U.S. side that the free trade accord is
beneficial to both countries," the ministry said.
The free trade accord, known as the KORUS FTA, was signed in June 2007, but its
ratification in both countries has been stymied by disagreements on auto and beef
trade.
South Korea's National Assembly has been delaying deliberations on the KORUS FTA,
citing growing pessimism about the deal in the U.S. Congress. But Seoul's
parliamentary committee on foreign affairs and trade recently approved the pact,
signaling possible ratification during this month's plenary session.
There have also been concerns here that the free trade deal might severely hurt
some sectors such as the agriculture industry.
U.S. President Barack Obama has opposed ratification of what he called a "badly
flawed" free trade agreement with South Korea, citing imbalanced auto trade.
The Democrat-controlled Congress has expressed concerns that its ratification
will undermine support from U.S. trade unions, a key political base, due to
possible job cuts amid the worst recession in decades.
But at their first and second summits in April and June, South Korean President
Lee Myung-bak and Obama agreed that the free trade accord could bring benefits to
both countries and committed to working together to chart a way forward. They
also stressed the importance of avoiding protectionism and economic nationalism.

The auto provisions are the thorniest issue in the bilateral trade deal, the
biggest for the U.S. since the North American Free Trade Agreement in 1993. The
U.S. also wants South Korea to lift restrictions on shipments of its beef to the
South Korean market, put in place due to concerns over mad cow disease.
In the meantime, there has been speculation that the U.S. may demand a
renegotiation of the accord. Some U.S. officials and experts have proposed that
the sides come up with a "creative" way to circumvent a renegotiation, which
Seoul strongly opposes.
South Korean Trade Minister Kim Jong-hoon has said his government will not revise
the text of the deal itself, though some U.S. officials are reportedly hoping to
address the concerns via side agreements.
The accord, if it takes effect, will boost South Korea's economic growth by 6
percent over the long-term, and help create 340,000 new jobs, according to the
state-run Korea Institute for International Economic Policy.
The U.S., the world's largest economy and South Korea's second-largest trading
partner, conducted U$84.7 billion in two way trade last year.
sam@yna.co.kr
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