Saturday, December 4, 2010

South Korea renegotiates US Free Trade Pact

It was a notable failure of the side meetings at the Seoul-G20 meetings when it became abundantly clear that the Obama administration was determined to win a renegotiation of the pending Free Trade Agreement (KORUS FTA). At the time, the Lee administration of South Korea declared no renegotiation was possible. Times, they change: a week ago, new negotiations started and on Friday a new deal was reached.

For the U.S., this was a major repositioning of obligations... onto South Korea. The U.S. negotiators were tasked to land a number of advantageous items in the area of automobile import and export. They got almost all of them. The Americans also claim a number of improvements in access for agricultural products, but...

For the ROK, there was a single concession that had to be gained. Not negotiable. No changes in the Beef trade. Well...
The agreement did not address issues with the beef trade.
or as reported in the Yonhap version of the story:
Focus, however, had been on autos as South Korea has refused to discuss the key beef issue: possible shipments of cuts from older cattle. Weeks of street rallies almost paralyzed the Lee Myung-bak administration in early 2008 after Lee's decision to resume U.S. beef imports.

The U.S. beef industry recognized the sensitivity of the issue and did not want to jeopardize the rapid increase in beef exports to South Korea since 2008.
Punted it down the road, thankfully. It will be hard enough for President Lee to go home with this deal. It is a huge deal, and in the main a great gain for both countries, but if the Korean media decides to run with the (entirely true) story that the adjustments to auto and truck tariff reduction schedules is gamesmanship to reward certain unions (and union-government controlled companies) in the U.S. that the Obama administration owes, then President Lee may get the capitulationist label stuck on him.

That would be too bad, both because the rest of the FTA is a good thing and because the Lee administration is on poor footing since the full story has come out on his government's less-than-ept response to the Yeonpyeong Island attack.

The U.S. side was ready to get the FTA ratified as it was, but couldn't so long as a Pelosi-Reid Congressional leadership was willing to hold it back until the (then new) Obama administration was satisfied with it. This new deal will also sail to ratification.

The hard part will now be what the ROK does with it. Previously, they had functionally ratified the deal. Now...
The South Korean National Assembly's Foreign Affairs and Trade Committee passed the deal last year, but will have to again deliberate on the revised text before it is sent to the assembly's plenary session.

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