South Korea must give more on beef, cars: Republican

WASHINGTON Wed Nov 3, 2010 7:46pm EDT

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WASHINGTON (Reuters) - South Korea must agree to do more to open its market to U.S. beef and autos if it wants Congress to approve a trade deal that has been stalled for three years, a senior Republican lawmaker said on Wednesday.

"I think it's up to the Koreans to decide whether they really want to have an agreement or not," said Representative Dave Camp, who is expected to become chairman of the House of Representatives Ways and Means Committee next year.

"I think particularly in the auto sector, as well the beef sector, those have been the two problem areas that we need to see some progress in," Camp said.

He spoke with Reuters one day after an election in which the Republicans gained control of the House for the first time since 2006, and one day before U.S. and South Korea begin talks to try to resolve issues blocking U.S. approval of a bilateral free trade agreement signed in June 2007.

The two countries hope to reach a deal before President Barack Obama arrives in Seoul for the November 11-12 Group of 20 summit.

Republicans are generally more supportive of free trade agreements than Democrats, but Camp's stance on South Korea shows how important regional influences can be.

His home state of Michigan remains the heart of the U.S. auto industry and has the second highest unemployment rate in the country at 13 percent.

The Ways and Means panel has jurisdiction over trade in the House, so Camp will play a key role in any congressional consideration of the Korean pact.

Meanwhile, Ford Motor Co. planned an advertising blitz in about a dozen U.S. papers on Thursday to underscore its demand that South Korea do more than it already agreed in the 2007 agreement to open its market to U.S. automobiles.

AUTO SALES TO KOREA KEY

"The U.S. government is going to make some good proposals to move this forward but the ball is in the Koreans' court. They have to decide whether they're going to open their market to U.S. automobiles," said Steve Biegun, Ford vice president for international governmental affairs.

U.S. trade officials have been tight-lipped about what additional concessions they want Korea to make.

But outgoing Ways and Means Committee Chairman Sander Levin, also a Michigan Democrat, has complained the current agreement is deficient on a number of fronts.

As far back as 2007, Levin has criticized U.S. negotiators for agreeing to phase out a 25 percent U.S. tariff on pickup trucks as part of the agreement.

He also has called for provisions phasing out a 2.5 percent tariff on U.S. automobiles to be renegotiated so that increased South Korean access to the U.S. auto market is tied to increased American car sales in that market.

Levin has complained that pact does not adequately address South Korean regulatory and tax barriers that Ford and other automakers believe keep them out of the market.

He has pushed for South Korea to accept U.S. car safety and emissions standards as a substitute for its own, and has criticized the pact's dispute settlement mechanism.

Biegun said there was no doubt the U.S. Trade Representative was "mindful of the long list of deficiencies that led this agreement to languish for three years. I think there's a widely shared consensus that this did not open the Korean market to automobiles."

South Korea has indicated it would only accept minor changes to the pact, which already requires it to immediately eliminate its 8-percent tariff on passenger cars and its 10-percent tariff on pickup trucks.

Biegun said he did not believe the high-profile deadline ahead of the G20 summit set the stage for an agreement that makes only cosmetic changes.

(Reporting by Kim Dixon and Doug Palmer; Editing by Xavier Briand)

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Comments (1)
fidelisM wrote:
Having traveled to Korea several times, I can tell you the biggest reason American cars don’t sell well there is quality and value, which our cars don’t offer versus European and Korean local cars.

Korean consumers are very picky about quality, then price. In this framework, American car companies just cannot compete just yet, albeit they have improved much.

As for American beef, it is already selling very well at discount markets and places where price is an issue. This is a country with only fifty million people, so they cannot consume much more than they are now. Word is that much of the imported American beef goes to China, just to satisfy the US demand for beef imports.

People like Dave Camp should not comment on issues he probably has no clue about in real life. I assume it is to get popular support.

Nov 03, 2010 6:40pm EDT  --  Report as abuse
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