Tech industry awaits approval of U.S.-South Korea free trade agreement

November 10, 2010

The Hill

Gautham Nagesh

The technology industry is hoping U.S. and South Korean negotiators can settle an impasse over auto standards to approve a crucial free-trade agreement between the two nations ahead of Thursday's G-20 Summit in Seoul.

Both countries acknowledge approving the agreement would be mutually beneficial and provide a substantial boost to the approximately $70 billion in annual trade between the two allies. But the agreement, which was signed in April 2007, has yet to come up for approval in either nation's legislature.

"The tech industry, like most of the business community, is united in favor of passage of all three pending trade agreements. Of the three, the size and prosperity of the South Korean market makes this the most important pending free trade agreement for the tech sector," said TechAmerica spokesman Charlie Greenwald.

"Especially as Europe and other global competitors pursue their own agreements with South Korea, we need to make sure that U.S. tech companies have access to these nearly 50 million South Korean consumers."

But U.S. firms already have access to South Korean consumers; the country is one of the highest importers of tech products from the U.S. Hi-tech exports to South Korea were down 15 percent to $8.3 billion in 2008, while imports rose 12 percent resulting in a hi-tech trade deficit of $9.5 billion. The overall trade deficit between the two nations is about $10 billion.

John Murphy, vice president for international policy at the U.S. Chamber of Commerce said because of a prior agreement under the World Trade Organization, the U.S. and South Korea have enjoyed more than a decade of tariff-free trade of information technology products.

Murphy said the main benefits of the agreement for U.S. tech firms are improvements in the business environment, which should result in stronger intellectual property protections for U.S. companies, clearer enforcement of international laws and a more efficient procedure for customs and imports.

President Obama and South Korean President Lee Myung-bak have upped the pressured on negotiators to find a compromise to resolve disputes over auto security and emission standards that have stalled the agreement. The U.S. has argued Korea's standards amount to a non-tariff trade barrier for American auto companies. Chrysler and Ford have both publicly opposed the trade deal in its current form.

United States Trade Representative Ron Kirk and Korean Minister for Trade Kim Jong-hoon resumed their discussions Tuesday in Seoul and are expected to continue talks Wednesday.

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