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South Korea trade pact back by Ford


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South Korea trade pact back by Ford

New agreement could lower barriers that limit imports of American autos and beef

David Shepardson / Detroit News Washington Bureau

Washington -- Ford Motor Co. on Monday praised the White House's decision to work toward improving U.S. automakers' access to the South Korean market.

"Ford Motor Co. looks forward to working with the administration and Congress on an agreement that provides meaningful market access for our manufacturers, that shows rapid growth of American-made automobiles sold in Korea, and that is enforceable," Ford said in a statement.

In April 2007, the Bush administration signed a free trade agreement with South Korea, but it stalled in the United States, primarily over concerns about U.S. beef and auto exports.

President Barack Obama, at the G-20 summit in Canada this weekend, said his administration will launch new talks with South Korea aimed at resolving those differences before he visits in November; he wants to submit an agreement to Congress soon thereafter.

The Dearborn automaker said it is "pleased that the Obama administration has committed to negotiate improved auto provisions to ensure that the U.S.-Korea trade agreement will actually help open one of the most closed markets in the world to automotive imports."

Ford said the South Korean government "has a long history of actively intervening in the market to exclude imports.

"A well-negotiated U.S.-Korea Free Trade agreement," it said, "represents the last, best chance to open the Korean market to imported automobiles."

Most U.S. automakers have opposed the agreement negotiated under the Bush administration because it did little to open the closed auto market. General Motors Co. has stayed neutral, because of its South Korean unit GM Daewoo, which is the fourth-largest automaker there.

U.S. Rep. Sander Levin, D-Royal Oak, chairman of the House Ways and Means Committee, said in a statement the administration needs to address the obstacles that American automakers face in gaining access to the South Korean market.

The problem with the 2007 deal, Levin said, "is that it does not effectively address the regulatory and tax barriers that have led to one-way trade and hurt our industrial sector, as well as kept out our beef. Until recently, South Korea was unwilling to discuss changes to address these vital issues in the industrial sector."

Levin said the White House's deadline can be met "only if the outstanding issues are fully addressed with enforceable commitments."

The House and Senate must consider trade agreements, without amendments.

In a Detroit News interview earlier this year, U.S. Trade Representative Ron Kirk, who will initiate the new discussions with South Korea, said he is fully aware of the "disparity." Korean automakers sell 700,000 vehicles annually here, but U.S. automakers export fewer than 7,000 vehicles annually to Korea.

The White House says the new deal likely will be sent to Congress early next year, but there's a chance it could be completed during a lame duck session of Congress after the November elections.

Obama says a new pact will strengthen ties between the two countries, and may boost the export of American goods by as much as $11 billion a year.

From The Detroit News: http://www.detnews.com/article/20100629/AUTO01/6290344/1148/South-Korea-trade-pact-back-by-Ford#ixzz0sFFRPXuv

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By Mark Kleis

During the G20 Summit currently taking place in Toronto, Canada, President Obama met with South Korean President Lee Myung-bak in order to discuss the remaining issues stopping a free trade deal between the U.S. and South Korea.

Obama announced that he hopes to address the issues currently keeping the U.S. and South Korea from forming a mutually beneficial free trade agreement before he is set to meet Myung-Bak in November for the next G20 summit in Seoul, South Korea, according to Reuters.

Ford speaks on behalf of American automakers

Following news of Obama intentions to address the free trade arrangement, Ford Motor Company released a statement suggesting their eagerness to work with Congress in order to help develop more equitable terms for the trade agreement with South Korea – a market regarded as one of the most closed markets in the world.

“Ford Motor Co. looks forward to working with the administration and Congress on an agreement that provides meaningful market access for our manufacturers, that shows rapid growth of American-made automobiles sold in Korea, and that is enforceable,” said Ford in a statement.

The previous administration began talks with South Korea regarding changes to the trade arrangement, but talks were later stalled when concerns were raised regarding U.S. beef and auto exports, according to The Detroit News. the Obama administration hopes to rekindle that conversation and develop an agreement that would allow American automakers a fair chance to compete in the market.

General Motors stays quiet

GM has found itself in a unique position regarding this topic, as the American automaker currently owned Daewoo, which is based on South Korea. GM, and the rest of America’s automakers, only export roughly 7,000 vehicles into South Korea each year, but Korean brands export 700,000 vehicles per year to American soil – representing a massive trade deficit for American automakers, based on information obtained by The Detroit News during an earlier interview with U.S. Trade Representative Ron Kirk.

Obama’s plans for a revised trade agreement will have to reach approval from both the U.S. Congress and South Korean leadership, but if achieved, the President hopes to boost American exports by as much as $11 billion per annum.



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