Obama win likely to harm S. Korea's bid for early FTA approval

By Shin Hae-in
SEOUL, Nov. 5 (Yonhap) -- South Korea's push to ratify a free trade agreement
(FTA) with the United States by year's end is widely expected to face further
hurdles following Barack Obama's election as U.S. president.

Experts say chances for the trade bill's approval by the U.S. Congress may be
even slimmer, as outgoing U.S. President George W. Bush has been unsuccessful in
his efforts over the past year to convince the Democratic-controlled Congress to
pass the agreement. During the course of his campaign, Obama has repeatedly
expressed his opposition to the pending trade deal with Korea, citing an
imbalance in auto trade between the two nations.
"It will happen and must happen, both countries know," said political analyst Bae
Myung-jin. "But it will likely take more time than the Korean government may have
hoped for."
Seoul's eight-month-old Lee Myung-bak government has been seeking parliamentary
approval of the much-delayed trade pact, particularly since a controversial
decision to resume U.S. beef imports earlier this year for which it was widely
criticized. The government submitted the motion to the National Assembly last
month in the second of such attempts.
The agreement, originally struck under the former Roh Moo-hyun administration
after year-long negotiations, has been pending with the legislatures of both
countries for over a year.
"Regardless of the circumstances in the U.S., the government and the ruling party
have agreed to have the deal approved by the National Assembly before the end of
this year," President Lee told a meeting of the Korea-U.S. Business Council last
week.
The approval of the Korea-U.S. FTA will likely give a boost to the economic
initiatives of Seoul's conservative government, which are currently being pounded
by growing uncertainties in the financial market.
For its part, while Lee's Grand National Party (GNP) appears on the surface to be
more resolute than ever for speedy passage of the deal, fissures are growing in
the party as an increasing number of lawmakers are pointing out that a change of
plan might be necessary.
"Obama has stated his opposition to the FTA on many occasions. There is a need
for us to take this into consideration," Chung Mong-joon, a ranking GNP lawmaker,
told a party meeting Monday. "We may need to reexamine the timing (to press for
ratification of the FTA)."
Ruling party whip Hong Joon-pyo, on the other hand, chose to stand by the
government.
"It is highly unlikely for Washington to break off the deal following a change of
administration, especially a deal made with Korea, its ally," he said.
Hong went on to emphasize technical issues surrounding the bill's passage.
"While the deal will take immediate effect in the U.S. after its ratification,
Korea must still pass 24 additional bills before the deal can take full effect,"
he said. "It makes sense for us to approve the FTA now and settle the remaining
bills after the U.S. election."
The main opposition Democratic Party remains skeptical of the deal and describes
the ruling party's efforts for its quick passage as "unrealistic and naive." It
is also mindful of public sentiment here, which links the bilateral trade pact
with the unpopular beef imports deal struck in April.
"What use is it for us to ratify the deal when the U.S. Congress remains so
critical?" said the party's floor leader, Won Hye-young. "It is so anachronistic
for the ruling party to believe that if we approve it first the U.S. will also
approve the deal out of respect for its ally."
The ruling party controls an absolute majority of 172 seats in the 299-member
unicameral house, while the main opposition and minority parties hold the rest.
The Seoul-Washington free trade pact has been billed as the most significant
event in bilateral relations since the military accord of 1953 following the end
of the Korean War. Economically, the deal is expected to boost two-way trade,
already worth an annual US$79 billion, by as much as $20 billion in the coming
years.
Business groups here are also pushing for early ratification of the agreement,
complaining that the delay is causing heavy losses to South Korean exporters of
manufactured goods to the world's biggest market.
Farmers, however, are demanding sufficient compensation and countermeasures,
fearing they will not be able to compete with cheaper imported products once the
deal is finalized.
Disputes are also rampant among U.S. lawmakers, with many Democrats opposed to
the deal citing an imbalance in auto trade at a ratio of 700,000 to 5,000 sales
per year against the U.S. They also want to see steel shipped to South Korea.
While emphasizing that he is not opposed to the principle of free trade, Obama
has described the Korea-U.S. FTA as "badly flawed" in terms of fairness.
"It is easy to expect a further delay in the ratification of the FTA by the U.S.
legislature after Obama's win," Seoul's Trade Minister Kim Jong-hoon told a
parliamentary session last month. "But I see this as a matter of when, not
whether."
"Washington will likely want to revise the FTA, especially in the automobiles
sector," said Park Jong-kyu, a research fellow with the Korea Institute of
Finance. "But in the long run, the election will not make a significant impact as
the Obama administration will eventually decide to settle the deal."
hayney@yna.co.kr
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