Wednesday, January 30, 2008
[IWS] CRS: Proposed U.S.-SOUTH KOREA FREE TRADE AGREEMENT (KORUS FTA): PROVISIONS & IMPLICATIONS [22 January 2008]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL34330
The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications
January 22, 2008
William H. Cooper (Coordinator),
Mark E. Manyin, and Vivian C. Jones, Foreign Affairs, Defense, and Trade Division
Stephen Cooney and Remy Jurenas, Resources, Science, and Industry Division
http://assets.opencrs.com/rpts/RL34330_20080122.pdf
[full-text, 56 pages]
Summary
On June 30, 2007, United States Trade Representative Susan Schwab and South
Korean Foreign Trade Minister Kim Hyung-chong signed the proposed U.S.-South
Korean Free Trade Agreement (KORUS FTA) for their respective countries. If
approved, the KORUS FTA would be the largest FTA that South Korea has signed
to date and would be the second largest (next to North American Free Trade
Agreement NAFTA) in which the United States participates. South Korea is the
seventh-largest trading partner of the United States and the United States is South
Korea's third largest trading partner. Various studies conclude that the agreement
would increase bilateral trade and investment flows.
The final text of the proposed KORUS FTA covers a wide range of trade and
investment issues and, therefore, could have wide economic implications for both the
United States and South Korea. The KORUS FTA includes issues on which the two
countries achieved early agreement, such as the elimination on tariffs on trade in
most manufactured goods and the partial liberalization in services trade. The
agreement also includes provisions on a number of very sensitive issues, such as
autos, agriculture, and trade remedies, on which agreement was reached only during
the final hours of negotiations.
If the agreement is to enter into force, Congress will have to approve
implementation legislation. The negotiations were conducted under the trade
promotion authority (TPA), also called fast-track trade authority, that the Congress
granted the President under the Bipartisan Trade Promotion Act of 2002 (P.L. 107-
210). The authority allows the President to enter into trade agreements that receive
expedited congressional consideration (no amendments and limited debate). The
White House has not indicated when it will send the draft implementing legislation
to Congress. (The TPA sets no deadline for the President to do this.)
While a broad swath of the U.S. business community supports the agreement,
the KORUS FTA faces opposition from some groups, including some auto and steel
manufacturers and labor unions. In addition, the agricultural community and some
Members of Congress have withheld support for the agreement until South Korea
lifts its restrictions on imports of U.S. beef. Some U.S. supporters view passage of
the KORUS FTA as important to secure new opportunities in the South Korea
market. Opponents claim that the KORUS FTA does not go far enough in opening
up the South Korean market and is a lost opportunity to resolve long running
concerns about South Korean barriers. Other observers have suggested the outcome
of the KORUS FTA could have implications for the U.S.-South Korean alliance as
a whole.
Differences between the White House and the Democratic leadership in the
Congress over the implications of the KORUS FTA have made the timing and even
the likelihood of the President's submission and the Congress's subsequent
consideration of implementing legislation uncertain.
This report will be updated as events warrant.
Contents
The KORUS FTA in a Nutshell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Automobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Key Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Estimates of the Overall Economic Effects of a KORUS FTA . . . . . . . . . . . . . . . 5
An Overview of the U.S.-South Korean Economic Relationship . . . . . . . . . . . . . 6
U.S. and South Korean Objectives in An FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Sector-Specific Issues and the KORUS FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Agriculture and Sanitary and Phytosanitary Issues . . . . . . . . . . . . . . . . . . . 10
Autos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Other Manufactured Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Pharmaceuticals and Medical Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Financial and Other Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Trade Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Kaesong Industrial Complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Foreign Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Labor Rights and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Government Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Environment Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Institutional Provisions and Dispute Settlement . . . . . . . . . . . . . . . . . . . . . 43
Other Technical Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Next Steps, Implications, and the Emerging Debate . . . . . . . . . . . . . . . . . . . . . . 44
Appendix A: South Korea's restrictions on Imports of U.S. Beef . . . . . . . . . . . . 48
Appendix B: South Korean Motor Vehicle Manufacturing . . . . . . . . . . . . . . . . 50
Appendix C: South Korea's Entry into the Visa Waiver Program . . . . . . . . . . . 52
List of Tables
Table 1. Annual U.S.-South Korea Merchandise Trade, Selected Years . . . . . . . 7
Table 2. Asymmetrical Economic Interdependence (2006) . . . . . . . . . . . . . . . . . 7
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Order Code RL34330
The Proposed U.S.-South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications
January 22, 2008
William H. Cooper (Coordinator),
Mark E. Manyin, and Vivian C. Jones, Foreign Affairs, Defense, and Trade Division
Stephen Cooney and Remy Jurenas, Resources, Science, and Industry Division
http://assets.opencrs.com/rpts/RL34330_20080122.pdf
[full-text, 56 pages]
Summary
On June 30, 2007, United States Trade Representative Susan Schwab and South
Korean Foreign Trade Minister Kim Hyung-chong signed the proposed U.S.-South
Korean Free Trade Agreement (KORUS FTA) for their respective countries. If
approved, the KORUS FTA would be the largest FTA that South Korea has signed
to date and would be the second largest (next to North American Free Trade
Agreement NAFTA) in which the United States participates. South Korea is the
seventh-largest trading partner of the United States and the United States is South
Korea's third largest trading partner. Various studies conclude that the agreement
would increase bilateral trade and investment flows.
The final text of the proposed KORUS FTA covers a wide range of trade and
investment issues and, therefore, could have wide economic implications for both the
United States and South Korea. The KORUS FTA includes issues on which the two
countries achieved early agreement, such as the elimination on tariffs on trade in
most manufactured goods and the partial liberalization in services trade. The
agreement also includes provisions on a number of very sensitive issues, such as
autos, agriculture, and trade remedies, on which agreement was reached only during
the final hours of negotiations.
If the agreement is to enter into force, Congress will have to approve
implementation legislation. The negotiations were conducted under the trade
promotion authority (TPA), also called fast-track trade authority, that the Congress
granted the President under the Bipartisan Trade Promotion Act of 2002 (P.L. 107-
210). The authority allows the President to enter into trade agreements that receive
expedited congressional consideration (no amendments and limited debate). The
White House has not indicated when it will send the draft implementing legislation
to Congress. (The TPA sets no deadline for the President to do this.)
While a broad swath of the U.S. business community supports the agreement,
the KORUS FTA faces opposition from some groups, including some auto and steel
manufacturers and labor unions. In addition, the agricultural community and some
Members of Congress have withheld support for the agreement until South Korea
lifts its restrictions on imports of U.S. beef. Some U.S. supporters view passage of
the KORUS FTA as important to secure new opportunities in the South Korea
market. Opponents claim that the KORUS FTA does not go far enough in opening
up the South Korean market and is a lost opportunity to resolve long running
concerns about South Korean barriers. Other observers have suggested the outcome
of the KORUS FTA could have implications for the U.S.-South Korean alliance as
a whole.
Differences between the White House and the Democratic leadership in the
Congress over the implications of the KORUS FTA have made the timing and even
the likelihood of the President's submission and the Congress's subsequent
consideration of implementing legislation uncertain.
This report will be updated as events warrant.
Contents
The KORUS FTA in a Nutshell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agriculture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Automobiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Other Key Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Estimates of the Overall Economic Effects of a KORUS FTA . . . . . . . . . . . . . . . 5
An Overview of the U.S.-South Korean Economic Relationship . . . . . . . . . . . . . 6
U.S. and South Korean Objectives in An FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Sector-Specific Issues and the KORUS FTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Agriculture and Sanitary and Phytosanitary Issues . . . . . . . . . . . . . . . . . . . 10
Autos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Textiles and Apparel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Other Manufactured Goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Pharmaceuticals and Medical Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Financial and Other Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Trade Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Kaesong Industrial Complex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Foreign Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Labor Rights and Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Government Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Environment Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Institutional Provisions and Dispute Settlement . . . . . . . . . . . . . . . . . . . . . 43
Other Technical Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Next Steps, Implications, and the Emerging Debate . . . . . . . . . . . . . . . . . . . . . . 44
Appendix A: South Korea's restrictions on Imports of U.S. Beef . . . . . . . . . . . . 48
Appendix B: South Korean Motor Vehicle Manufacturing . . . . . . . . . . . . . . . . 50
Appendix C: South Korea's Entry into the Visa Waiver Program . . . . . . . . . . . 52
List of Tables
Table 1. Annual U.S.-South Korea Merchandise Trade, Selected Years . . . . . . . 7
Table 2. Asymmetrical Economic Interdependence (2006) . . . . . . . . . . . . . . . . . 7
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 7:45 AM
