The modified Korea-U.S. free trade agreement will bring in less surplus for domestic carmakers than had initially been forecast, a government report said Friday.
The FTA, signed in 2007 and modified in November is expected to expand local carmakers’ trade surplus by $488 million annually, $53 million less than the equivalent figure under the earlier terms agreed. The two nations agreed to scale back tariff cuts for cars in the revisions made in November.
“The revisions made were designed to provide more protection for livestock farmers and pharmaceutical companies at the expense of some loss at carmakers. But all in all, the downsizing of expected surplus is very small in relation to the overall gain,” Hwang Moon-hyeun, director general of FTA at the Finance Ministry, told reporters.
The report also said carmakers will see revenue expansion of $599 million annually while imports will increase by $71 million. Under the initial agreement, the industry was forecast to see a revenue increase of $614 million and $73 million of additional imports.
The analysis was released at a time when the government and political parties have been trying to narrow their differences to pass the bill through the National Assembly.
The ruling and opposition parties held negotiations on Friday to tackle the issue, but made little progress.
In an attempt to pressure the government and the ruling party, the main opposition Democratic Party put forward what it calls a “10 plus two” proposal earlier this week that calls for revising 10 items in the trade pact through renegotiations with the U.S. It also calls for two measures aimed at minimizing the deal’s effect on the local industries.
But the government and the ruling party have remained reluctant to accept the proposals.