Web Date: July 9, 2007
U.S., South Korea Sign Free-Trade Pact
The chemical industry is welcoming a free-trade agreement between the U.S. and South Korea, but the measure faces opposition in Congress from Democrats who fear it could cost auto industry jobs.
The agreement is the largest bilateral trade deal the U.S. has negotiated since the 1993 North American Free Trade Agreement. It would eliminate tariffs on 95% of consumer and industrial products between the two countries within three years.
South Korea is among the world's top 10 chemical-producing countries. Already the sixth-largest market for U.S. chemical exports, which totaled $4.3 billion in 2006, the country is among the fastest growing markets for them in Asia.
"We are eager to see chemical tariffs in Korea eliminated as quickly as possible," says American Chemistry Council President Jack N. Gerard. "We are pleased that this agreement includes strong protections for investments and intellectual property, as well as important commitments by Korea on regulatory transparency and technical barriers to trade."
Officials signed the accord on June 30, just hours before President George W. Bush's authority to negotiate "fast track" trade agreements expired. That authority allowed the White House to broker free-trade deals that Congress must either approve or reject, but cannot change.
"This is the most commercially significant trade agreement for the U.S. in nearly 15 years," says Commerce Secretary Carlos M. Gutierrez.
Key Democrats, however, contend the measure does not go far enough in dismantling South Korea's nontariff barriers, especially in the automotive industry. Last year, they note, South Korea exported more than 700,000 cars to America, while the U.S. shipped fewer than 5,000 cars there.
"Unfortunately, the agreement as currently negotiated is a missed opportunity," House Speaker Nancy Pelosi (D-Calif.) and other House Democratic leaders say in a joint statement. "We cannot support it as currently negotiated."
U.S. Trade Representative Susan C. Schwab says the pact "will stand on its own, without amendment," and she believes lawmakers "will come to understand the details and learn just how compelling a deal it is."
- Chemical & Engineering News
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