Korea-US FTA to take effect on March 15

The free trade agreement between Korea and the United States (KORUS FTA) will go into effect on March 15, six years after the two countries kicked off talks on the trade pact in June 2006.
 
Trade Minister Bark Tae-ho (Photo: News 1)

 Trade Minister Bark Tae-ho announced Tuesday that Deputy Trade Minister Choi Seok-young had met his counterpart Wendy Cutler, assistant U.S. trade representative, in Seattle early this week to agree on the date of implementation.

The accord means that Korea will be the only country to run free trade pacts with both the U.S. and the European Union. Its FTA with the EU took effect last July.

“Seoul and Washington agreed to wrap up all the necessary procedures so as to implement the bilateral agreement on March 15,” Bark said in an unscheduled press briefing at 8 p.m.

“We set the date because companies in the two countries will need some time to prepare.’’

With regard to the controversial issue of the investor-state dispute (ISD) system provisions, Bark said that Seoul will negotiate with Washington further after the FTA goes into effect.

Korea’s opposition parties have called for the cancellation of the stipulation, which they claimed overly favors the U.S.

Bark expressed hopes the free trade pact will help Asia’s fourth-largest economy see increased exports to the U.S., as demand for South Korean goods from European consumers wanes amid the eurozone fiscal crisis.

The deal was signed in July 2007 and approved by the U.S. Congress in October 2011. The two countries had been working to finalize a date for the implementation.

The FTA is expected to generate up to 350,000 new jobs, while substantially cranking up national output in the near future.

State-run think-tanks previously presented studies where they projected the deal would boost Korea’s gross domestic product (GDP) by a maximum of 5.66 percent over the next decade.

Increased exports to the world’s largest economy are also expected to boost Korea’s annual trade surplus by an average of $2.78 billion over 15 years after its effectuation.

However, there is a flip side ― the farming and livestock industries of Korea are feared to suffer damage due to the full-fledged advent of cheap U.S. products here.

Over the next 15 years, the industries are likely to face losses of up to 850 billion won every year, which could cause higher unemployment rates in the already-dismal rural economy.

Worse, service areas including the legal and media markets are expected to meet big challenges when advanced U.S. enterprises tap into the market.

In this climate, worries sprout up that opposition parties might come up with a set of political maneuvers to nullify the FTA or delay its effectuation as some of its members have vowed to do so. <Korea Times/Kim Tae-gyu>

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