South Korea, US sign free trade agreement

  • Business
  • Sunday, 01 Jul 2007

WASHINGTON (AP): The United States and South Korea signed a free-trade agreement Saturday that reflected U.S. calls for stricter labor and environmental standards. 

South Korean Trade Minister Kim Hyun-chong and U.S. Trade Representative Susan Schwab signed the agreement in Washington, meeting a deadline under President George W. Bush's expiring "fast track'' special trade powers. 

That "fast track'' authority prevents lawmakers from amending the deal before voting on it. The trade deal still needs to be approved by lawmakers in both countries to take effect. 

Bush said Saturday that the Korean agreement would generate exports for U.S. farmers, ranchers, manufacturers and service suppliers. He urged Congress to ratify the agreement. 

The agreement would eliminate and lower tariffs and other trade barriers in a wide range of industrial goods and services, including automobiles, agricultural products and financial services. 

South Korea also agreed to change its tax system for larger vehicles, which the U.S. contended was discriminatory. South Korea currently sells more than 700,000 vehicles a year in the United States, while U.S. makers only sell about 5,000 in South Korea. 

The two countries concluded the free-trade agreement in April after 10 months of tough negotiations, only to have it hung up over last-minute amendments requested by Washington. The amendments incorporate stricter labor and environmental guidelines set by the new Democratic majority in Congress for free trade deals. 

In Seoul, the Ministry of Foreign Afairs and Trade said that South Korea had "decided to accept a U.S. proposal to change the agreement'' to reflect the new U.S. guidelines. 

South Korean President Roh Moo-hyun said the changes "would not greatly hurt (South Korea's) interests.'' 

The new U.S. guidelines for labor and environmental standards are "terms that, in principle, have to be followed in view of both international regulations and domestic regulations,'' Roh said. 

The two governments say slashing tariffs and other trade barriers will boost commerce between the two close allies. But opponents say the deal will squeeze workers in both countries. 

In central Seoul, thousands of striking workers were joined Friday by students and farmers to protest the trade accord, which they say will harm livelihoods. 

Chong Hye-won, director of the international department of the Korean Metal Workers' Union, said around 20,000 protesters were at the scene, mostly members of her union. A police estimate was not immediately available. 

Some 110,000 members of the 150,000-strong KMWU walked off the job for a second day Friday in opposition to the free trade deal, Chong said. 

The union is South Korea's largest, and includes workers of large companies such as Hyundai Motor Co. 

The U.S. also concluded free trade deals with Colombia, Panama and Peru ahead of Saturday's deadline.

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