There’s still nervous tension surrounding the South Korea/U.S. (or KORUS) free-trade agreement. While the U.S. Congress and the Obama Administration both finally signed off on the aging FTA, now South Korean lawmakers are balking at the effort.
The U.S. Congress approved the FTA on Oct. 12, and President Obama signed it into law on Oct. 2`. However, South Korea’s National Assembly considered the trade pact on Oct. 28, but failed to approve the treaty.
Now, South Korea President Lee Myung Bak, is having his administration provide information via print and television ads to outline the benefits to the country, reports Bloomberg News, in an attempt to sway the South Korean congress and the public to support KORUS.
President Bak wants ratification completed in November so the agreement can go into effect Jan. 1. However, opposition forces such as the country’s Democratic Party want to delay the vote. South Korea has legislative elections in April, and this could be a hot-button issue.
Hundreds of farmers and others stormed the National Assembly to protest the pact on Oct. 28, Bloomber reports. They contend that threatens the country’s agricultural and retail industries, especially small businesses and the self-employed.
“We can gain the advantage in some areas and give up a little in others,” Lee Sung Kwon, chief economist at Shinhan Investment Corp. in Seoul, told Bloomberg. “There’s no way any country can have benefits only.
The government estimates that South Korea’s trade surplus could expand by $2.77 billion annually on average in the first 15 years of the agreement. Automobile, electronics and chemical exporters are expected to be among the biggest contributors, according to an Oct. 13 government assessment. It estimated that the country’s gross domestic output may increase by as much as 5.7 percent annually in the first 10 years and generate 350,000 jobs.
For the U.S. pork industry, it’s estimated that South Korea could absorb 5 percent of the annual production and prompt the creation of 9,000 pork-specific jobs. Once fully implemented, KORUS could generate an additional $687 million in U.S. pork exports and add $10 per animal to live-hog prices.
The FTA would “help boost South Korea’s trade surplus by freeing up exchanges with economies producing 61 percent of global output,” said South Korea’s Ministry of Strategy and Economy in a statement. According to Finance Minister Bahk Jae Wan, in a commentary on the ministry’s website, “delaying ratification would lose the country more than it could win.”
When U.S. lawmakers passed KORUS they also approved FTAs with Colombia and Panama. Governing bodies in both of those countries have since passed those agreements.
Source: Bloomberg News