Korea Beef Concession Not Enough To Clear The Proposed FTA

The chairman of the House of Representatives Trade Subcommittee says agreement by the South Korean
government to reopen the Korean market to US beef exports is not enough to clear the way for
congressional action on a US/Korea Free Trade agreement (KORUS FTA). In spite of the fact that US
Trade Representative Susan C. Schwab says the beef agreement removes “the major obstacle” to
congressional consideration of the pact, Rep. Sander Levin, D-Mich., says it is not enough, and the
administration must do more to address what he called “major imbalances and barriers to trade”
between the two countries.

The KORUS FTA could result in another confrontation between the administration and the
Democratic leadership of Congress, which already has derailed a proposed FTA with Colombia. US
textile manufacturers are opposed to the Korean agreement because Korea has a large, well-developed
textile industry that already exports a significant amount of textiles and clothing to the United
States, and unlike the case with some other FTAs, they do not see any market opportunities for US
products. They also are concerned that the agreement, as currently written, does not provide for
effective Customs enforcement. They point out that the Korean agreement could undercut some of the
benefits of the Central America-Dominican Republic, Andean nation and North America FTAs, which
they do feel are beneficial to US textile manufacturers.

In a statement following announcement of the beef agreement, Rep. Levin said, “A last minute,
unenforceable, untested agreement on beef is not enough to satisfy Congress,” adding that the
agreement will only continue what he says is “one-way trade” with Korea.

Despite Levin’s comments, Ambassador Schwab said she will work in earnest with Congress and
the US agriculture, manufacturing and services sectors of the economy to gain approval of the

April 22, 2008