Hope for U.S.-South Korea FTA

Lauren Dansey, BASC Research Assistant

The new Republican Congress is predicted to take greater steps towards developing U.S. free trade deals. But will the new Congress be able to resolve the current issues blocking the U.S.-South Korea free trade agreement (FTA)? Reuters suggests the key to overcoming the barriers to the agreement maybe found in Rob Portman, the recently elected Republican Senator from Ohio. Senator Portman served as the U.S. trade representative (USTR) under the Bush administration from 2005-2006. While Portman was at the USTR office, he began talks with South Korea about signing a U.S.-South Korea FTA.  

The New York Times reported the newest roadblock to completing the FTA is White House concerns over the impact on trade sensitive sectors such as the auto industry. Labor Unions and car companies like Ford claim an FTA with South Korea will create an imbalanced trade where American car manufactures will suffer. Ford representatives argued that “for every 52 cars Korea ships here, the U.S. can only export one there.” 

Auto and union lobbyists have so far successfully delayed ratifying the agreement, but the incoming Congress will likely complete the South Korea FTA as part of their program to liberalize trade. Even Dave Camp—a Republican representative from Michigan, home of the auto industry—is advocating completing the FTA with South Korea. The GOP-run house will particularly focus on signing agreements with countries like South Korea to capitalize on the expanding Asian market. Moreover, politicians see the FTA as opportunities to increase U.S. involvement in Asia and counter Chinese regional influence. This new congressional agenda gives Senator Portman the opportunity to exercise his experience as the former USTR and complete the talks with South Korea he began five years ago.