The agreement, which still has to be approved in both countries’ legislatures, is the largest of its kind signed by the United States since the North Atlantic Free Trade Agreement in 1994.
Also known as KORUS, the FTA was negotiated by George W. Bush in 2007, but remained incomplete due to opposition from the U.S. auto sector and cattle ranchers who felt that it did not go far enough in addressing their concerns.
Obama faced widespread criticism just last month for failing to sign the agreement on schedule while in the international spotlight during a visit to Korea. Obama said at the time that he would take a few weeks to continue negotiations and make it better.
The supplementary deal, which included participation by labor and the auto industry, chiefly Ford, was finalized on Saturday. The agreement includes certain provisos that will allow the auto industry to gain access to Korean markets for five years under reduced tariffs while U.S. tariffs remain in place.
Each American auto manufacturer will receive an exemption from controversial and costly safety regulation standards for its first 25,000 vehicles. And the United States has until year eight to start phasing out the current 25 percent tariff on trucks, while Korea is required to reduce its tariffs on electric cars.
The arrangement will give “U.S. automakers the time to reverse the damage caused by decades of South Korean protectionism,” said Bob King, president of United Autoworkers Union (UAW) in a statement.
King believes the deal will boost union manufacturing jobs. He is also pleased that it includes enforcement mechanisms essential to protecting those jobs.
“This agreement is an important step toward a global rule-based trade system, an important step in giving labor a real voice in trade negotiations,” he stated.
Alan Mulally, CEO of Ford Motor Company also applauded the outlines of the agreement in a statement published last Friday on the White House website.
The changes made over the last few weeks represent “standing up for American manufacturing,” said Ways and Means Committee Chairman Sander Levin (D-Mich.) in a statement.
Senate Minority Leader Mitch McConnell (R-Ky.) called the deal “a positive development,” the NY Times reported.
American Chamber of Commerce President and CEO Thomas Donohue, who had been strongly pushing for completion of the FTA, said in a statement, “the new Congress should make passage of the Korea-U.S. free trade agreement (KORUS) an immediate and urgent priority.”
According to the chamber, Korea is America's seventh largest trading partner, and failing to accept the agreement would put us at a competitive disadvantage with the European Union, which already ratified an agreement that will go into effect on July 1, 2011.
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