Washington, DC –The two-year-old US-Korea Free Trade Agreement hasn’t done enough to open the Asian country further to US exports, particularly American-made cars and trucks and agricultural products, according to Sen. Debbie Stabenow (D-Michigan).
Stabenow is the new Chair of the US Senate Finance Committee’s sub-committee on international trade.
Criticizing a trade deal that the Obama administration heralded in 2012, Stabenow cited the treaty as a reason for “caution” in negotiating the proposed Trans-Pacific Partnership that, she said, stands no chance of being ratified this year as there are “some very sticky issues” involving Japan and other nations in the talks.
“We’re continuing to push and the reason for this hearing was to talk about Korea but also to send a message about Japan and what comes next,” Stabenow told the media at a press conference following her first sub-committee meeting.
The free trade pact, she said, “has fallen short of our hopes” while the US trade deficit with Korea “has increased by nearly 50 percent,” Stabenow said.
The agreement, she added, “aimed to open Korea’s markets to American automakers. But agreeing to phase-out tariffs on US-made automobiles hasn’t been enough. Due to non-tariff barriers, Korea remains one of the most closed auto markets in the world.”
Stabenow’s evaluation of the US-Korea trade pact were countered by the Office of the US Trade Representative which released a statement saying that through May, sales of ‘Big Three’-made autos to Korea are up by more than 20 percent and key agriculture products like dairy have seen a more than 40 percent increase in exports.
“These are real results that benefit farmers, workers, and small business owners across the US. We also fully expect that as further tariff elimination takes place and Korea’s economy improves, we will reap greater benefits from KORUS,” the statement said.
Since the Korea agreement took effect, tariffs have been reduced on US-made autos by 50 percent and the value of US auto exports to Korea have increased by 80 percent.
The Association of Global Automakers (AGA), the association representing major foreign automakers including Korean automakers Hyundai Motor Co. and Kia Motors, noted that after the deal foreign automakers have started “exporting thousands of US-made vehicles to Korea” that are “supporting thousands of American jobs.”
Five years ago, 23 import brands together held just 6 percent of Korea’s automotive market, the group noted.
The AGA has released figures showing that Toyota Motor Corp., Honda Motor Co, Volkswagen and Nissan Motor Co. exported to Korea a total of 14,637 vehicles produced in the US in 2013. The group acknowledged that implementation “has not been seamless, and it is unrealistic to expect that an agreement of this magnitude and complexity could be implemented without encountering some challenges.”