World

FTA important to wait ‘ambassador’

SEOUL : US exporters could lose ground to European competitors unless Congress quickly ratifies a free trade agreement

Published June 17, 2011 Updated June 17, 2011 06:54am

2 min

By Muhammad Iqbal

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Answering a question, she expressed concern about the disadvantage US businesses could face when an FTA between South Korea and the European Union the most ambitious trade accord the EU has negotiated takes effect in July.

"Yes, I'm concerned about the disadvantage that American businesses will be at if there is a EU-Korea FTA and we are too slow in ratifying and implementing the Korea-US FTA," she told journalists.

A US trade deal with South Korea "will bind our alliance, make us even closer and anchor the US economy to this dynamic region", she said, adding it would also create substantial export opportunities and support tens of thousands of new jobs in both countries.

But the biggest boon would be the "dynamic gains" that come from innovation and building linkages between the two economies and from healthy competition, she said.

There has to be discussion about the scope and implications of such a major deal, she said, but in the end people would understand "this is too important to fail and too important to wait".

"I'm very optimistic about the prospect for the ratification of the US-Korea free trade agreement in a fairly short time period," she said, adding the commitment of both governments is "very strong."

The EU-South Korea pact, the first the EU has signed with an Asian nation, will take effect on July 1. It will axe 98 percent of customs duties within five years, apart from those on a few Korean farm products.

But the US-South Korea pact, signed in 2007, has yet to be ratified by the two countries' legislatures.

It would remove 95 percent of tariffs between the two economies but has been controversial in both countries. The main US union confederation says big businesses would be the main beneficiary.

President Barack Obama's administration made ratification a priority this year, saying the agreement will support 70,000 US jobs and help double US exports to South Korea within five years.

But some Republicans want two other lingering free trade pacts -- with Colombia and Panama pushed through alongside the South Korea deal.

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