Monday, April 02, 2007

FTA Agreement Reached!

Well, it seems that despite all the doubts and protests, the first hurdle to signing the U.S.-Korea FTA has been cleared. At 4:00 p.m. in Seoul (so 3:00 a.m. our time) the Korean and American representatives shook each other's hands with Korean Trade Minister Kim announcing that this agreement was “the world’s largest free trade deal” since NAFTA. It is a big deal and America's first bilateral trade pact with a major Asian economy.

In another article by the International Herald Tribune, which goes into more detail, the contentious beef and rice issues have been resolved by Washington dropping its demands on the South Korean government's rice subsidies in exchange for Seoul resuming imports of American beef after the World Organization for Animal Health declares U.S. beef safe in a ruling next month. It's interesting to note however that the Kaeseong products were not mentioned at all.

All that is left is for Congress and the South Korean Parliment to ratify the deal, which will be another huge hurdle to overcome. There are high political costs for both sides with tens of thousands of South Korean farmers expected to lose their jobs and the U.S. manufacturers to face increasing competition. Overall, consumers on both sides are expected to benefit though.


Sean said...

Wow, you're quick. I was just going to post this and fulfill my "entry with link" quota for the week.

One thing I noticed was that, while it seemed like rice and beef were getting lots of attention, the biggest effect will be felt in the auto industry. According to the NY Times, 80% of the trade gap between the US and Korea was due to the auto trade.

The article also says that Roh is accused of making Korea the 51st state of the US, which led to vehement protests by Canada.

Grace said...

Hehe. Sorry Sean! As they say, the early bird gets the worm! ^_^ v