South Korea Ratifies Free Trade Deal With U.S.

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South Korea’s National Assembly approved a landmark free trade agreement with the U.S. on Tuesday during a tumultuous session in which an opposition lawmaker reportedly set off a tear gas device in an attempt to block passage of the pact.

Ruling conservatives rammed through the hotly contested agreement in a surprise legislative session with most opposition party members abstaining from the vote. The ruling Grand National Party had previously avoided forcing the pact through for fear of further hurting its waning popularity ahead of 2012 elections.

The opposition Democratic Party initiated the FTA deal when it was in power, but opposed subsequent changes it said would favor U.S. automakers and a dispute settlement mechanism, which it claims strips Seoul of any ability to defend its interests.

The passage means the pact, which was ratified by the U.S. Congress and signed into law by President Obama in October, will likely take effect on Jan. 1, the date the U.S. and South Korea had previously targeted.

"This is a win-win agreement that will provide significant economic and strategic benefits to both countries," U.S. Trade Representative Ron Kirk said in a statement in Washington. "We look forward to working closely with the government of Korea to bring the agreement into force as soon as possible."

The South Korea-U.S. free trade agreement is the biggest U.S. trade pact since the North American Free Trade Agreement took effect in 1994 and could boost annual trade between the two countries by as much as 25%.

The U.S.-Korea agreement is expected to boost agricultural exports by as much as $1.8 billion every year, as it immediately eliminates duties on the majority of U.S. farm products exported to Korea, including wheat, corn, soybeans for crushing and cotton and reduces or eliminates duties on many others over time.

More than 90% of U.S. pork products will be able to enter the Korean market duty free on January 1, 2016, date-certain, with many tariffs phasing out sooner. South Korea’s 40% tariff on imports of beef muscle meat will be phased out over a 15-year period.

 

Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

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