South Korea’s top trade and economic policymakers urged the National Assembly on Wednesday to quickly ratify the long-standing free trade deal with the United States.
The free trade accord, known as the KORUS FTA, was signed in June 2007 and supplemented in late December of last year with minor modifications that mostly deal with the auto industry. The agreement was ratified by the U.S. Congress last month and Seoul is under mounting pressure to follow suit.
Lawmakers here, however, remain locked in debate over ratifying the pact, as opposition parties claim it favors the U.S. side, calling for renegotiations and more protections for local farmers and industries. The government wants the deal to take effect starting next year.
“The free trade deal would help our firms compete with foreign rivals in better conditions,” Trade Minister Kim Jong-hoon said in a radio interview. “We can’t delay ratification of the free trade pact,” he said.
Kim claimed that supportive measures are in store for the industries expected to be damaged by the trade pact, and local companies are preparing for new business opportunities as well.
According to the report jointly compiled by 10 local state-run think tanks, including the Korea Institute for International Economic Policy, if the deal takes effect, South Korea will see its gross domestic product expand by an additional 5.66 percent in the long term.
The think tanks also predicted that South Korea would see its trade surplus with the U.S. increase by $140 million annually over the next 15 years after the FTA goes into effect.
“As we go through the global fiscal crisis, the importance of troubleshooting abilities of the government and the political circle is getting more attention,” Finance Minister Bahk Jae-wan said in a crisis management meeting held in central Seoul.
“We should keep our ears open to opinions from all walks of life and reflect them in the policymaking process but now is the time that we need the ability to tackle important pending issues in a timely manner,” he added.
Bahk pointed out that the U.S. credit rating downgrade is attributable partly to its political deadlock in Congress and the prolonged debt crisis in Greece can also be blamed on failure in narrowing differences between Germany and France.
“The reason why Fitch upgraded the credit outlook for our economy is because it gave high credit for our troubleshooting ability,” he noted, citing the rating agency’s recent decision to shift its credit outlook for Korea to “positive” from “stable.”
