Obama's administration rejects FTA pact with South Korea
Posted: 10 March 2009 0655 hrs

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WASHINGTON: US President Barack Obama's top trade envoy designate said on Monday that a free trade agreement that had been signed with South Korea needs to be renegotiated.

"In the case of Korea, the current status quo simply isn't acceptable," Ron Kirk, who was named by Obama as US Trade Representative, said at his confirmation hearing in the Senate.

He was answering questions from senators on the future of the US-South Korea Free Trade Agreement signed in 2007 but awaiting ratification by both countries' legislatures.

The pact would be the largest for the United States since it signed the North American Free Trade Agreement with Canada and Mexico in 1994.

Ahead of his election in November, Obama has called the deal "badly flawed," saying it did too little to narrow a huge trade imbalance in South Korea's favour, especially in the auto trade.

South Korea has ruled out renegotiating the pact, which cleared a sub-committee of its parliament last month after opposition legislators boycotted the meeting.

US Secretary of State Hillary Clinton cited the imbalance in the auto trade during her confirmation hearing in January.

In written responses to questions from the Senate Foreign Relations Committee, she said the pact gave South Korean auto exports "essentially untrammeled access" to the United States, which she added would have no leverage to break down Seoul's non-tariff barriers.

"If the South Koreans are willing to re-engage negotiations on these vital provisions of the agreement, we will work with them to get to resolution," she said.

South Korea shipped about 700,000 cars to the United States in 2007 while importing 5,000 American cars, official figures showed.

Some analysts in Seoul however say the figures are misleading, since they exclude more than 125,000 vehicles made by a General Motors subsidiary in Korea while including vehicles made by a Hyundai plant in Alabama. - AFP/de