Lee's FTA Comments Create Needless Confusion

      November 23, 2009 13:20

      In a press conference on Thursday with U.S. President Barack Obama, President Lee Myung-bak said, "If there are any problems in the automobile sector... then we are ready to resolve this issue." The comment came in response to a question by an American journalist who asked if Lee was willing to open up Korea's automotive market further to expedite ratification of the bilateral free trade agreement. The U.S. side probably interpreted Lee's comments as signaling his willingness to either re-negotiate the FTA or hold additional talks.

      But faced with questions from lawmakers on Friday, Foreign Minister Yu Myung-hwan said the president's comments did not signify a re-negotiation or additional talks, while Trade Minister Kim Jong-hoon said they meant that Korea would "listen to what the U.S. has to say." In other words, there is no change in the government's stance that the FTA stands as signed by both sides in 2007.

      Two-and-a-half years on, the FTA has yet to be ratified by both sides, due to opposition by the U.S. Senate. U.S. discontent over the trade imbalance with Korea in the automotive sector has played a major role in Washington's lack of action. Last year, Korea exported around 598,000 cars to the U.S. worth US$7.32 billion. But imports of American-made cars to Korea totaled just 8,864 vehicles worth $220 million. At the crux of the matter is the fact that this imbalance is not the result of a systematic discrimination against American cars by the Korean government, but that Korean consumers find American cars inferior to European and Japanese ones in terms of fuel efficiency, design, performance and comfort. U.S. pressure forced Korea's automotive market wide open, but the benefits of increased access have gone to the Japanese and Germans instead.

      A government official explained that Lee's comments expressed his willingness to listen to the U.S. complaints and elucidate Korea's position, in order to end the continued delays. But the bottom line is that the comments have generated unnecessary confusion.

      Such comments can be thrown out as the last card if all else fails, but such impromptu comments sap their negotiating power. Korea's national interests suffered in the five years of the previous administration from impromptu comments by the former president. It is time we went beyond such mistakes. The president's aides have made a big mistake in allowing this blunder to happen.

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