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US Industry’s Free Trade Wish List

Posted March. 16, 2006 03:13,   


With Korea-U.S. Free Trade Agreement (FTA) talks scheduled to start in May, representatives from U.S. industries bombarded the U.S. government with their own wishes for a Korea-U.S. FTA, asking the government to open the Korean service market and eliminate market regulations.

A total of 26 organizations, including the National Association of Manufacturers, the U.S. Rice Federation, the National Livestock Producers Association, and the U.S.-Korea Business Council aired their requests at a public hearing held by the Office of the U.S. Trade Representative (USTR) on March 14 in Washington D.C. in order to hear industry opinions.

Alticor vice president Richard Holwill, who came to the hearing as a representative of the U.S.-Korea Business Council, emphasized, “Regulations in Korea on the entire service sector, such as regulations covering media, broadcasting, communications, legal services, financial services, accounting, computer, audio-visual, and dispatch deliveries, should be abolished.”

He even mentioned ways to eliminate regulations on the service sector, saying, “As with other FTAs the U.S. has concluded, negotiations should use a ‘negative list’ approach.” Under a negative list approach, all sectors and services will be liberalised except for those explicitly stated in the agreement. He said, when it comes to broadcasting, restrictions on airtime for overseas programs, dubbing, and limitations on the re-transmission of foreign TV commercials should be abolished.

An official from the American Farm Bureau Federation said, “It is a cause of concern that Korean farmers have requested rice be excluded from the FTA.” He added, “Korea has to either dramatically lower or eliminate its agricultural tariffs that range from one to 500 percent depending on the product.” Tariff cuts on U.S. beef imports, including the 40 percent tariff on frozen meat and the 72 percent tariff on processed meat, and the abolition of agricultural subsidies that have been provided to Korean indigenous cattle ranchers were also raised.

A representative from the U.S. pharmaceutical industry said, “Korea should set drug prices that reflect new drug development costs.”

The representatives also did not fail to mention “in-phase import tariffs” that are levied on imported automobiles, which have often caused trade disputes between the U.S. and Korea. An official from the automobile industry said, “Korea’s automobile taxation system needs to go through an overall reform, and Korea needs to understand the safety and exhaust standards (of U.S. automobiles).”

The U.S. Association of Importers of Textiles and Apparel argued for the abolition of tariffs on all textiles and apparel by both nations and a flexible application of the rules of origin.

Meanwhile, Choi Seok-young, the economic attaché of the Korean embassy to the U.S., pointed out that a Korea-U.S. FTA should be a win-win proposition for both countries, that the U.S. government needs to understand the difficulties the Korean agricultural industry is in, and that if a one-sided agreement is reached, chances are that neither the Korean National Assembly nor the U.S. Congress will ratify it.

Seung-Ryun Kim srkim@donga.com