VOINOVICH, LEVIN URGE CAUTION OVER UNITED STATES-KOREA TRADE NEGOTIATIONS
U.S. Senator George V. Voinovich (R-OH) and U.S. Senator Carl Levin (D-MI) sent a letter to U.S. Trade Representative Rob Portman today, urging prudence as the United States begins to negotiate a United States-South Korea Free Trade Agreement (KFTA). As co-chairmen of the Senate Auto Caucus, they are particularly troubled by the pervasive automotive imbalance between the United States and Korea and the failure of past negotiations to curb the imbalance.
"It is important for us to remember that past negotiations with Korea have failed to remove Korea's unfair trade barriers against American autos, and Korea continues to abuse the system. I hope that my good friend U.S. Trade Representative Rob Portman will work to ensure that these negotiations are done right," said Senator Voinovich. "I fear that if the appropriate amount of caution is not taken, the agreement will significantly benefit Korean automakers without giving U.S. automakers any additional access to Korea's historically closed market. The U.S. auto industry is facing dire circumstances that put the jobs of millions of hard-working Americans at risk. It is imperative that a KFTA not aggravate the already difficult times this vital U.S. industry faces."
"Korea has the world's most protected auto market and has not lived up to its past commitments to remove its protective tariff and non-tariff barriers to U.S. automotive products," said Senator Levin. "Any future agreement with Korea must be based on enforceable rules guaranteeing access for U.S. automobiles and parts in Korea."
The senators' letter to U.S. Trade Representative Portman underscored the following points:
Korea has taken full advantage of free trade by becoming one of the world's major auto exporting countries, exporting a full 70 percent of the vehicles it produced in 2005. Korean auto sales into the U.S. increased from approximately 132,000 autos sold in 1996 to approximately 731,000 autos sold in 2005.
While Korea relies on exports to support its domestic automakers, the country remains the most closed auto market in the developed world. U.S. automakers continue to face significant barriers to entry in their attempts to sell into Korea's auto market.
Two separate automotive trade agreements intended to open Korea's market were signed by the United States and Korea in 1995 and 1998.
Sales of imported vehicles in Korea totaled approximately 31,000 in 2005, or 2.7 percent of Korea's total domestic vehicle market, and approximately 4,000 of those vehicles were from the United Statesabout the same amount sold by U.S. manufacturers into Korea in 1996.
In order for the negotiations to be successful, the United States must ensure that the new agreement addresses all existing tariff and non-tariff barrier auto issues and must also ensure that future non-tariff barriers are not introduced to restrict access to the Korean auto market.
http://voinovich.senate.gov/news_center/record.cfm?id=251138&