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U.S. committed to resolving outstanding issues for KORUS FTA's ratification: USTR

All Headlines 05:00 May 07, 2010

By Hwang Doo-hyong

WASHINGTON, May 6 (Yonhap) -- The Obama administration is committed to resolving outstanding issues before ratifying the pending free trade agreement with South Korea, the chief U.S. trade negotiator said Thursday.

Speaking to the 7th Annual U.S.-Asia Pacific Council here, U.S. Trade Representative Ron Kirk said, "We are also working to deliver economic and strategic trade benefits and opportunities by resolving outstanding issues on the U.S.-Korea Free Trade Agreement, in an effort to move it forward at the appropriate time."

Kirk expressed hope that the KORUS FTA's ratification will help expedite the recovery of the world's biggest economy from the worst recession in decades.

"When it goes into effect, this agreement will create billions of dollars in new market access for American exporters and strengthen our ties with an important partner in the region," he said.

The U.S. has yet to officially propose a dialogue with South Korea to address the outstanding issues, chiefly lopsided auto trade and restricted shipments of beef. Some officials favor a side agreement rather than revising the text of the FTA, signed in 2007.

The U.S. has no timeline for ratification.

Some say the passage of the health care reform bill, Obama's top domestic policy issue, might help move things along, while others say Obama is still reluctant to invest his political capital on the issue, due to more pressing issues such as immigration and the slumping economy.

Kirk said last month that Obama "would like to complete at least one of three pending trade agreements with Korea, Colombia and Panama this year," although he declined to say which accord would come first.

The U.S. Trade Representative's office said in a report last month that the Obama administration is trying to find ways to address the auto and beef issues.

"The Administration ... is committed to working together with Korea to move the KORUS FTA forward," the report said. "In 2009, the United States Government initiated a thorough review of the FTA and is currently consulting closely with Congress and U.S. stakeholders to identify the most effective approaches for dealing with these concerns. This will involve working through a number of outstanding issues, particularly related to autos and beef."

The report cited estimates by the U.S. International Trade Commission that "the reduction of Korean tariffs and tariff-rate quotas on goods alone would add $10 billion to $12 billion to the annual U.S. Gross Domestic Product and around $10 billion to annual merchandise exports to Korea."

The U.S. goods trade deficit with South Korea was US$10.6 billion in 2009, down $2.8 billion from 2008, according to the report.

After meeting with South Korean President Lee Myung-bak in Seoul in November, Obama said that he is ready to deal with South Korea separately from other Asian countries, such as China and Japan, which have been accumulating a huge surplus in trade with the U.S.

"Those imbalances are not as prominent with Korea," Obama said at that time.

Lee told Obama that South Korea maintains healthy trade relations with the U.S., compared with China and Japan, and that the U.S. deficit is easily neutralized once the U.S. financial surplus with South Korea is included.

hdh@yna.co.kr
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