The U.S. commerce secretary says "time is of the essence" for lawmakers in Washington and Seoul to approve a free trade agreement as South Korea prepares to implement a similar deal with the European Union.
Concluding a three-day visit to promote ratification of a trade pact with South Korea, U.S. Commerce Secretary Gary Locke told reporters the agreement will significantly boost trade in both countries. But lawmakers in both countries have yet to approve it.
Locke says both governments want legislative passage by July 1, when South Korea’s free trade agreement with the European Union goes into effect.
"That's even more incentive for us to move as quickly as we can, so that there will not be a long gap between July 1 and when the tariffs on U.S. products and services are either eliminated or lowered because we don't want a long period of time in which products from the EU have a significant competitive advantage over U.S. goods," Locke said.
Seoul and Washington agreed on changes to their pact in December, modifying the original deal they made in 2007. It is the largest such pact for the United States since the North American Free Trade Agreement with Mexico and Canada in 1993.
The revised agreement allows the United States five years to phase out a two-and-a-half percent tariff on South Korean-made cars.
But during negotiations, the issue of beef was off the table. South Korean negotiators ruled out U.S. requests to ease restrictions on American beef.
Three years ago, thousands of South Koreans protested against plans to allow U.S. beef imports because of fears of mad cow disease. Those protests made the issue too politically sensitive to include in the trade deal.
Although South Korea will continue to ban imports of meat from older cows, because of fears of mad cow disease, Secretary Locke notes the pact phases out Seoul’s 40 percent tariff on U.S. beef. American beef sales plummeted here after one U.S. cow was found to have the deadly disease in 2003. No other infected cows have been found.
Even with the restrictions, Locke notes U.S. beef sales to South Korea doubled last year, but competition is strong from Australian meat.
Proponents of the deal in the United States predict it will boost annual exports to South Korea by up to $11 billion and support about 70,000 jobs.
U.S. critics contend the pact will send more American jobs overseas and increase the U.S. trade deficit. They say that while the agreement eliminates or reduces most South Korean tariffs, the government here can still use other methods, such as a value-added tax, to discriminate against American products.
Locke, who will soon become the U.S. ambassador to China, led a delegation this week to South Korea that included four members of Congress. They toured South Korean companies that use American products and met with U.S. business executives operating here. They also met opposition politicians in Seoul Korea who expressed concerns about the agreement.
The United States is Seoul’s second largest export market and its third largest source of imports.