South Korea’s chief FTA negotiator said today that if the United States demands to renegotiate their bilateral trade agreement, it would greatly harm confidence in the United States.
Appearing on CBS Radio, negotiator Lee Hye-min — reminding the Americans that they are currently pushing bilateral agreements with other nations including the Doha Development Agenda — said to demand for the renegotiation of a signed agreement ran counter to international custom and could greatly harm confidence in the United States.
Yes, he really said that. Not that I don’t agree with him, but still, a Korean official lecturing the United States about renegotiation demands?
About the KORUS FTA agreement on cars, which the Obama camp has made an issue of, Lee said the because the agreement resolved all tariff and non-tariff issues pertaining to US car exports to Korea, the United States would gain nothing from renegotiation, and that the FTA sufficiently reflects US demands.
Concerning statements made about the a possible review of the FTA made by US ambassador Catherine Stevens and former Secretary of State Colin Powell, Lee said their statements meant that between allied states, if there’s a problem, you needed to talk about it. Then he reiterated that because the interest balance could be harmed if parts of the agreement were renegotiated, and this could lead to a renegotiation of the entire agreement, it would be difficult to renegotiate a particular section.
About whether the United States might demand talks using the term “additional negotiations” rather than “renegotiations,” Lee said what was important was not the terminology, but rather that it would be difficult to fundamentally alter the content of the FTA. He warned that if the agreement were changed in any way, it could break the interest balance and damage domestic support for the agreement.
About the possibility of holding additional negotiations like those that were conducted over the US beef issue, he said the beef negotiations were separate from the FTA and were held according to the standards of the OIE. They were not give-and-take negotiations like the FTA, he said.
He denied press reports that certain Obama aides met with the Koreans to demand they ratify the FTA by the end of the year. He also said with the campaign over, the new US administration would come to view the objective situation as a whole.
Marmot’s Note: My early predictions? President Obama drops his objections to the Korus FTA and it gets ratified. That said, if the White House asks for a “renegotiation,” “additional negotiation” or something else along those lines, the Korean side will find some way to get it done.
UPDATE: Lots of interesting reports on the FTA front:
Your Cars Suck. That’s Why We Don’t Buy Them.
Trade Minister Kim Jong-hoon, appearing on a KBS talk show, warned that the Obama administration may demand the FTA be renegotiated because of the automobile issue, noting that while there’s been no official statement to this effect from the United States, President-elect Obama did say so during his campaign.
He also said, however, that once President Obama takes office and actually looks at things closely, there’s was much room for his thinking and judgement to change.
Kim stressed that it would be improper to demand a renegotiation over the trade imbalance in automobiles, explaining that having Korea sell fewer cars in the United States wouldn’t resolve the issue. He pointed out that even the USITC opines that while Korean car exports to the United States would increase, this would have a negligable effect on US employment and production as well as on the industry itself.
Mind you, this is after Kim noted in a radio interview last week that car imports to Korea have greatly increased, but most were Japanese and European cars. He followed this up with a money quote, namely, that if US cars weren’t coming into the country at a time when other countries’ cars were, the right approach to the issue would come up only if one first considered whether the problem was some hidden trade barrier in Korea, or whether it was a problem in the competitiveness in the product being exported.
Or, to put this slightly less diplomatically, we don’t buy your cars because they suck.
In particular, he said that the problems of the US car industry didn’t come up just yesterday, and to blame its failures on another country was mistaken from the very beginning of the approach.
Again, put slightly less diplomatically, if the new administration wants to use us as a scapegoat, they can fuck off.
I have to say, I like the cut of this guy’s jib. Just hope he has the nerve to say the same thing to the Korean Democratic Party and Korean farmers.
Experts say it’s likely the Obama administration wil demand renegotiations of the articles dealing with the gradual 10-year elimination of the 25% tariff on Korean pickups and the immediate elimination of the 2.5% tariff on Korean cars under 3,000cc.
GNP Moves to Table FTA Ratification. DP Grumpy.
The Grand National Party meanwhile, wants to table the FTA ratification as soon as humanly possible. In fact, they want to put it on the floor as soon as Wednesday’s hearing on it is finished (by Nov 17, to be more specific). Floor leader Hong Jun-pyo criticized threats by the Democratic Party (Korea’s one, not the US one) to physically block tabling the ratification motion, noting that the agreement was concluded during the Roh Moo-hyun administration and even the Rohmeister called it the greatest accomplishment of his administration.
The Democratic Party, meanwhile, wants a separate committee set up to discuss the agreement, as opposed to tabling it via the Foreign Affairs and Trade Committee. They’ve also decided against participation in Wednesday’s hearing and are against a Nov 17 visit to the United States to press the US Congress to ratify the deal. The DP is looking for measures to be taken to deal with the impact of the FTA, particularly in rural communities, before the agreement is ratified.
Interestingly, the right-wing Liberty Forward Party is also opposed to directly tabling the ratification motion, noting the need to watch the post-election situation in the United States, examine the aftermath of the world financial crisis and for the government to take additional measures. It would also like to see a subcommittee established within the Foreign Affairs and Trade Committee to deal with the FTA.
Jeff Jones: Obama Will Back FTA
That brings us to Jeff Jones, who told the Korea Times he believes the Obama administration will support the FTA. I’m not sure if I’d agree with him that “the Obama administration will be a fiscally conservative administration notwithstanding its ties to labor, commitment to a national health scheme and so on,” but I do agree — at least its my initial gut instinct — that Obama will come around on the FTA.
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I don’t see what the big deal is. Renego or not, it’s hard to imagine the US abiding by this trade agreement any more than it abides by other ones to which it is a party. So they shouldn’t sweat the small stuff. Just pass the thing (if for no other reason than to piss off all the anti-free trade fucks) and blissfully ignore the provisions that you don’t like. It’s the American way!
(go ahead, Robert: take your best shot!)
If it passes then Obama fails his first test. He would be just like any of the others that talk a big game but lack the testicular fortitude to follow up.
Change indeed.
There is no trade AGREEMENT; it hasn’t been ratified by Congress, the approval of which is required to render the negotiated draft into an “agreement” that constitutes a binding instrument. Ditto for ROKGOV
Still, Lee’s point has some force. The fast track authority under which this abortion was negotiated is intended, in part – or perhaps “ostensibly” would be a better word – to induce foreign countries to enter into bilateral negotiations with the US by limiting the power of Congress of interfere with the details and restricting it to an up or down vote on package deals arranged by the sitting Administration.
Of course, that’s a bit of a smokescreen, because the Administration still has the corral the Members of Congress, either by adequately servicing the interests that they represent or being in a position to muscle them LBJ-style. When the Administration is sufficiently out of touch with those interests, and otherwise without adequate political capital to act coercively, either in general – or, as I think is the case in this instance, because of the very specific dissatisfaction of important interests with the premises upon which the very structure of the proposed FTA with Korea is based, the sleight of hand inolved in fast track becomes apparent.
On the other hand, besides the insufferable impudence of any ROKGOV official presuming to lecture anyone about abiding by tentative understandings given its history of weaseling, the US can easily explain the situation to its other trading partners on the merits. No country with experience negotiating with Korea will fail to be sympathetic on one or both bases. All Lee thus has accomplished is to diminish further Korea’s already badly depleted store of good will with Uncle Sam.
I’m perplexed by the Korean position on KORUS FTA. Under this agreement, Korea gets immediate tariff relief in critical sectors where its goods already enjoy quite favorable market conditions. In exchange, the US gets to wait up to 20 years for tariff relief in sectors critical to the US — for example, on agricultural goods. It’s free trade as envisioned by Wimpy: I’ll gladly pay you Tuesday for a hamburger today.
And although Korea does like to impose steep tariff barriers, the real method of market protection here is by non-tariff trading barriers, so called “technical barriers to trade”. These include things like the automobile engine displacement tax (supposedly to be quickly revised under the FTA, but I am dubious), the practically-useless WIPI standard which keeps iPhone and Blackberry off the local market while Samsung is No. 1 in America, and the requirement for Korea-unique ActiveX security controls on Internet commerce. Trust me, they will keep thinking up new ones like this, to the detriment of both American producers and the Korean public.
My sector — legal services — is one which supposedly will be liberalized to my advantage. And in general, I am a proponent of real free and fair trading relations. But on KORUS FTA, I am an opponent — it’s a bum deal for America and ought not to be approved by the US Congress.
Don’t forget that other major barrier to global economic integration – the total unwillingness of the Korean government, plus private and public education institutions, unions and other organizations, to allow the creation of ANY sort of system in Korea by which the citizens might learn to speak and understand English.
What’s not to understand Brendon? If someone is given a welfare Cadillac every year for 50 years, it’s pretty hard to wean them away from that sense of entitlement.
I agree with Linkd. It’s deliberate, in order to keep the masses in their place.
@5 & 7:
Oh… Oh my god. You guys just made my day. I honestly thought that I was the only person thinking this.
There are endless theories as to why English learning in Korea is so horrible, but I came to the conclusion at my most pessimistic low-point that the government was doing it on purpose.
I just can’t believe that, for a country with so many resources, a *half-decent* ESL curriculum hasn’t been created yet.
It seems to me that ESL is Korea’s Orwellian method of destroying production in order to keep capitalism churning.
The Fatman speaks:
That mother of all non-sequiturs ought to give any one inclined to credit anything that Korea’s very own Sidney Greenstreet says great pause.
Looking at Financial Times, Bloomberg and NYT, I don’t see anything about Obama targeting KORUS. They all say – quoting his chief of staff – that Detroit wants a chunk of Paulson’s $700 billion TARP fund, and Obama and Pelosi have clearly stated their desire to cut Detroit in to the tune of $25 billion. The current tide points to fairly immediate relief for Detroit in terms of cash from the feds. Protectionist trade policies and renegotiations may or may not come later.
Yikes! Sidney Greenstreet, as you no doubt know, was the inspiration for Jabba the Hutt…
Sperwer, we get it: Jeff Jones is fat. Let’s move on — there’s plenty of substantive stuff to talk about, like the nonsense idea that extending health care to all Americans is “fiscally conservative”, without childish taunts.
I think Obama’s social-welfare plans, together with the accumulated weight of social obligations already accrued (but not funded) and the latest bailout mania, will break the back of the United States and the United States Dollar.
FTAs are the ugliest of ugly legislation, but you can’t argue that this is a step in the right direction. Look what Obama has brought to Korea already:
1. Questions/delays in the FTA.
2. Plans for Korea to send troops to Afghanistan when the US asks.
3. Bilateral NK-US talks, with ROK already reduced to secondary meetings.
All this without him even getting into office yet.
OK, you’re going to have to help me with this one. How are 1) and 3) positive developments? Moreover, as far as I know, Korea has not agreed to 2).
My phrasing was unclear. All three are negative, even if not agreed yet.
OK. My bad.
Greenstreet’s simply being fat wasn’t his distinguishing characteristic as a villain; just a metaphor for it.
Granted, but the stuff to which you advert is OT in this thread, whereas Jones’ putative oracular powers aren’t.
There’s plenty of substantive stuff to talk about in the Jeff Jones interview that ran in the Korea Times. Like his call for the Republic of Korea to invite officials, including the President-elect, early on so as to bamboozle them.
Haven’t read it yet. Maybe Robert will showcase it in an entry, then I can get out my bull barrel
varmintelephant gunBrendon (#11),
I would not mind seeing the dollar break Korea’s way.
Anyway, Sperwer, I’d rather you lay off the fat stuff, lest your derision get turned on me one day. (Yes, I know that day is “Tuesday”!)
I don’t understand the Koreans’ objection to a possible US renegotiation on car imports… Didn’t they demand a renegotiation on US beef imports?
“didn’t they demand a renegotiation on US beef imports?”
No they didn’t. It was the Korean opposition parties (with their mad cow madness on the streets) which demanded renegotiation, not the current GNP administration who resisted the demands, paying a huge political price. The Bush administration helped out the GNP by revising some of the terms. I don’t see any hypocrisy on the Korean government’s parts when they also warned their country back in the spring, that Korea would lose international credibility if Korea asks for renegotiations for the beef deal with the US.
And by the way, American cars do suck. If they didn’t, why would they all go bankrupt? I know, the blame is on the Korean exporting manufacturers for that. But really, can we really say that with a straight face?
If they decided to phase out the engine displacement tax, then I think this is bad.
A bigger the engine of the car you bought, the bigger the tax bill. Why is this so discriminating against American manufacturers?
Small economy cars in Korea only make up 7% of the total cars on the road – one of the worst rates in the world, which tells you the tax has no effect on what Koreans buy. Koreans love big cars despite the tax. This at a time when oil imports make up over 20% of the country’s entire imports. Korea’s heavy oil dependence coupled with the high oil prices this summer, started the financial crisis which they’re still trying to recover from. They should strengthen the tax instead to discourage big cars, encouraging conservation, and reducing the damage to the environment.
If the engine displacement tax is a trade barrier, then the Chinese can also point to California emission standards as a trade barrier also. The emission standard is the only thing that’s keeping the Chinese cars out of the US.
The removal (or freeze on?) displacement and subway bond taxes is one area where Obama’s environmental hypocrisy is evident, although it’s unclear where and when the idea originated. According to web searches it’s a longstanding target of Detroit’s congressional representatives.
BTW this new site just appeared: http://www.supportkorusfta.org/.
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