Despite demands from parliamentary opposition parties, South Korea’s Trade Minister Kim Jong-hoon has stressed that the South Korea-United States free trade agreement (KORUS FTA) will not be renegotiated.

The Democratic Party (DP), the main opposition, has already confirmed that, before it could contemplate support to the KORUS FTA, the agreement would need to be re-balanced. They believe that, following its renegotiation last December, the treaty is now too favourable to the US, and that it should be further renegotiated.

One of the DP’s major points for re-negotiation would be that tariffs on beef imports from the US (the reduction of which was a particular sticking point for members of the US Congress) should be retained for a considerable period, together with stronger safeguards for the South Korean motor vehicle and finance industries.

The DP had also felt that official assistance for manufacturing and agricultural producers in South Korea, who would be affected by imports of products following reduced tariffs under FTAs signed by South Korea, would need to be augmented. However, in that respect, the government has already, this month, announced total support of KRW22.1 trillion (USD20.35bn), an increase of a further KRW1 trillion over the previous plan announced in 2007.

Kim Jong-hoon has now said, at a Korea Employers Federation forum in Seoul, that any idea of re-opening talks on the FTA with the US are unrealistic, given that both sides are now looking to ratify the agreement in September.

He concluded that the opposition demands were tantamount to a decision to repudiate the treaty, which, he said would be of great benefit to the South Korean economy and its competitiveness. It has been estimated that the KORUS FTA will increase the country’s gross domestic product by 5.7% and create 350,000 new jobs.

While the government could use its parliamentary majority to obtain the agreement’s passage, it does not want to do so and leave itself open to accusations of railroading it through parliament.

August 30, 2011
Source: Tax News

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