Procurement Free Trade Exemptions?

Procurement businesses run by small and medium-sized enterprises such as school lunch services are expected to be taken off the Korea-U.S. FTA table.

Seoul has decided to establish a taskforce under the wing of the prime minister’s authority in an effort to reconcile the conflicts among the stakeholders before the start of the second round of the FTA talks in Seoul scheduled for July 10-14.

Kim Jong Hoon, Korea’s chief delegate to the Korea-U.S. FTA talks, announced in a press conference held in the office of the ministry of the foreign affairs and trade at Sejongno Chongno-gu, Seoul on July 7, “Even if conditions on government procurement business are eased for foreign investors to start their businesses in Korea, some domestic markets concerning small and medium-sized companies would remain closed.”

“The U.S. side calls for us to increase the degree of market opening with regard to government procurement like airport services, port operations and construction services, including Incheon International Airport and Busan Port Public Service. However, for our side, these are not easily subject to concessions given the public interests for the Korean citizens,” he added.

Trade relief issues highly concerned by Seoul are apparently close to the deadline by the end of this year.

“What is necessary to amend the related laws and regulations is to refer an agreement to the U.S. parliament 180 days before TPA expires. TPA is the right for fast track authority that House members confer upon U.S. administrations. Since trade relief requires many relevant laws to be revised, the two sides are to draw an agreement by the end of this year” said Kim.

The U.S. Congress is supposed to review the Korea-U.S. FTA line by line once the two parties succeed in making concessions for each part and submit them to the House.

In the second round of talks for the free trade agenda, 270 Korean delegates and 75 for the U.S. in 16 divisions and two working groups will take part in the negotiations.

Keuk-In Bae bae2150@donga.com