Korea, U.S. Begin Free Trade Talks

The governments of Korea and the U.S. have announced the start of official free trade agreement (FTA) negotiations.

Korea’s Trade Minister Kim Hyun-jong and U.S. Trade Representative Robert Portman jointly announced the news at the U.S. Senate at 5:00 a.m. Korea time on February 3.

The official negotiations will begin on May 3, which is when the U.S. Congress will finish its deliberations. Until then, the two governments will hold preliminary negotiations.

However, the negotiation process will not be an easy one, since farmers advocacy groups and the Korean movie industry are vehemently opposed to a FTA.

A public hearing on the Korea-U.S. FTA hosted by the Ministry of Foreign Affairs and Trade yesterday was crippled after three disruptions by a farmers group, which pushed in and took over the platform.

“The Korea-U.S. FTA is also important in terms of the comprehensive alliance between our two nations, and we are pursuing it with the firm conviction that it is ultimately beneficial for the national interest,” said Kim to journalists before making the joint announcement.

Questioned on whether there will be exceptions regarding agricultural products, he said every FTA has exceptions, but that Korea needs to think hard about its own agricultural products that can be exported to the U.S.

Korea and the U.S. plan to conclude the talks by next March and implement the FTA in September.

Korea’s Foreign Ministry’s Kim Jong-hoon, former APEC SOM Chairman, and Assistant U.S. Trade Representative Wendy Cutler were appointed chief negotiators by Korea and the U.S., respectively.

Once the FTA takes effect, it will have great influence on the Korean economy as tariffs on over 90 percent of traded goods between the U.S. and Korea will be phased out over the next 10 years.

The Korea Institute for International Economic Policy projects that with a Korea-U.S. FTA, Korea’s trade surplus with the U.S. will decrease, but in a long run, Korea’s GDP will increase by 13.5 trillion won yearly, and 104,000 jobs will be created.

Experts in politics and economy analyzed that the FTA will also help raise Korea’s sovereign credit rating, maintain peace on the Korean peninsula, and favorably develop the dynamics of Northeast Asia.

Professor Yoo Hyun-suk of Kyunghee University said the U.S. would benefit from the FTA with Korea as it would be able to keep the Northeast Asia’s political and economic structure in check, which is currently being reorganized by China.

Keuk-In Bae Soon-Taek Kwon bae2150@donga.com maypole@donga.com