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FTA with Korea bad for economy: USW

Keywords: Tags  South Korea trade, USW, free-trade agreement, automotive, Catherine Ngai


NEW YORK — The U.S.-South Korea free-trade agreement, which went into effect a year ago, has hurt steel and manufacturing more than it has helped the industries, according to the United Steelworkers union.

The deal—seen as one of the most important trade agreements since the North American Free Trade Agreement (Nafta) came into force in 1994—went into effect March 15, 2012. At the time, some steel industry advocates had argued that it would help the automotive sector, while others said it would mean more Korean cars would be shipped to the United States.

"The anniversary will spark a debate about whether the (agreement) has been successful or not," USW president Leo W. Gerard said in a statement. "Of course, it’s early. But if this is success, we’re in a heap of trouble."

Ford Motor Co. vehicles registered in South Korea increased by 942 to 5,126 automobiles in 2012, while South Korean companies sold more than 1.25 million cars in the United States last year, according to union analysis.

"Clearly, the huge imbalance in auto trade has only been solidified by this ill-conceived trade agreement," Gerard said, adding that the U.S. trade deficit with South Korea grew faster in the first nine months of the agreement being in place than during the entire year.

"Changing our negotiating approach is most critical as negotiations on the Trans-Pacific Partnership (TPP) continue. Without substantial changes in our negotiating approach, we can assume that the TPP will give us the results we now see with South Korea and the results we’ve experienced in earlier trade agreements ranging from Nafta to China (permanent normal trade relations)," he added.

Under the U.S.-Korean trade agreement, auto companies had 12 months between the time of the pact’s implementation and compliance. There is also a special safeguard provision in the deal aimed at ensuring that the U.S. industry doesn’t suffer losses in case of an import surge from Korea (amm.com, Nov. 30, 2011).


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