Kim Suk-han

The Korea-U.S. summit in June strengthened relations between the two nations, with Korea working as an equal partner in efforts to make the Korean Peninsula nuclear-free as well as in addressing issues such as climate change. But while U.S. President Barack Obama has been setting up his new trade policies, progress on the Korea-U.S. FTA has stalled. What will become of it?

It is normal for a new U.S. administration to take some time to determine its trade policies. But the Obama government is taking too long. It has been six months since the White House said the U.S. president would unveil his trade policy agenda, but it still remains unclear when and how this announcement will be made. Even some key trade positions remain empty.

There are several reasons for this slow progress. First, the U.S. administration's focus is presently on energy and healthcare reform. Concerns about trade have fallen by the wayside. The White House is expecting Obama's speech on trade policy to come ahead of the G20 summit in September, but whether this will happen is uncertain with the escalating controversies surrounding healthcare.

Second, Obama faces a dilemma over trade policy. The labor unions, which form a core part of Democratic support, are asking for protection of U.S. jobs in the face of continued layoffs and pay cuts, but on the other hand, as the world makes efforts for economic recovery, Obama risks relations with other nations if he adopts protectionist policies. The U.S. has already suffered severe criticism from the international community for the "Buy American" clause included in its economic stimulus measure. Faced with such challenges, the administration cannot make a decision.

Third, the Obama administration wants trade policies that are different from those of the Bush government, so it wants to postpone ratifying FTAs agreed during the Bush administration and generally revisit trade policies, listening to those whose interest is affected by the FTAs the U.S. is planning to form. The hearings on the Korea-U.S. FTA will continue until Sept. 15. The administration expects representatives from numerous industries to participate, some of whom have already submitted their opinions.

All this adds complexity and causes further uncertainty about the future of the Korea-U.S. FTA because it means opportunities for both supporters and opponents to get their opinions heard. Opponents could unite to further delay ratification, while even supporters may call for changes to the agreement. For example, orange growers who support the agreement may request a change to reinforce their position in trading with Korea. Furthermore, the U.S. government itself may review the details of Korea's FTAs with India and the EU to see if there is anything unfavorable to U.S. interests.

The delay and the hearings, however, also provide a significant opportunity for the Obama administration to thoroughly review the Korea-U.S. FTA and continue to pursue it despite the difficult economic and political situations and Democrat calls for renegotiation. Thus, if Korea wants to save the FTA with the U.S., it must cooperate with the U.S. administration's efforts to establish a clear position. Considering the domestic troubles Obama faces, it will be early 2010 at the earliest when Congress may be able to decide the FTA's fate. In the meantime, the U.S. will try to take a hard look at it, and Korea should also do everything it can to save it.  

By Kim Suk-han, a U.S.-based lawyer