Obama inks South Korea free-trade agreement
posted at 12:55 pm on December 6, 2010 by Ed Morrissey
When Barack Obama came back empty-handed from his trip to South Korea, we noted the failure to get a free-trade agreement as a major and embarrassing failure. Over the weekend, though, the administration announced that the US and the RoK had finalized an agreement on free trade, and that Obama would push hard for quick ratification. However, a question on beef exports might induce at least one influential Democrat in the Senate to balk (via The Week):
President Barack Obama vowed at the weekend to work with Republicans and Democrats to pass a free-trade pact with South Korea that he said was a model for future agreements he would seek in Asia and around the world.
U.S. and South Korean negotiators struck a deal on Friday on the long-delayed pact, which was signed in 2007 but had not been ratified for three years because of U.S. auto and beef industry concerns.
The pact was an accomplishment for Obama, who faced an embarrassing setback when negotiators failed to settle their differences before he visited Seoul last month, but it was greeted less positively in South Korea.
Politicians in Seoul are less than impressed with the US position on autos, but they only have themselves to blame. The US will keep in place its 2.5% tariff on auto imports from South Korea, while South Korea will halve their own import duties on American autos — but those tariffs start at 8%. They want to see action on the US to lower tariffs immediately, but still keep their tariffs at a higher rate than ours. That doesn’t sound like solid ground for obstruction in Seoul, and the opposition will probably have a tough time arguing against the agreement on that basis.
However, that may not be true in the US. The beef industry expected the US to open the market for exports with a bilateral agreement, but the agreement mainly addresses autos. Seoul will still block beef from livestock older than 30 months, claiming concern over mad-cow disease controls in the US, even though that has never been an issue for domestic producers. ABC News reports that Senator Max Baucus (D-MT) may block ratification on those grounds:
Officials point out that the FTA calls for all tariffs on U.S. beef to be eliminated.
The problem is, the South Koreans still won’t let any U.S. beef products into their country from an animal older than 30 months. Why? It can all be traced back to the “mad cow” outbreak of 2003. South Korea shut down imports then and when they resumed in 2008 political protestors took to the streets. …
[T]he office of Montana Sen. Max Baucus is signaling that unless his concerns are answered he may opposed [sic] passage of the agreement. One of those concerns is the ban on beef over the age of 30 months.
The industry actually agreed to this restriction in 2008 in order to get a deal made during George Bush’s administration — a deal that Democrats blocked. Even without it, the US beef industry has regained its market share in South Korea over the past seven years. If the deal is good in other regards, then the US can build on it to break down other barriers as well. But if the Democrats back this version of the free-trade agreement, they’ll have difficulty in explaining why they didn’t just pass the agreement under Bush and give that process an extra two years to have made that kind of progress already.