It may take a special post-election session of Congress to address this sensitive trade contract without the heat of campaign politics

by Hamilton Loeb, Scott Flicker and Christine Han

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In June 2007, after 10 months of trading, Washington and Seoul signed the path-breaking U.S.-Korea Free Trade Agreement (KorUS FTA), which would extend to South Korea the benefits of FTA status that 20 other countries be delighted with with the U.S. The KorUS FTA is the most commercially eminently expressive in two sides free-trade agreement the U.S. has concluded in the 15 years since the espousal of the North American Free Trade Agreement (NAFTA), but prospects for ratification are diminishing as debate over the U.S. approach toward trade pacts moves to the center of the 2008 Presidential election cycle. The recent protests in Seoul against the resumption of American beef imports add further misgiving that Koreans will produce the agreement’s implementation a priority.

Were the agreement standing alone, it would be likely to have being approved in the U.S., notwithstanding political resistance from a few quarters. But because it is in line with other FTAs for congressional approval, and because the full approach of the last three U.S. Administrations—those of George H.W. Bush, Bill Clinton, and George W. Bush—has draw near under concentrated criticise in the 2008 campaign, the prospects in quest of U.S. ratification this year are dimming.

If the pact is not approved, it determination be unfortunate. The KorUS FTA would open Korea’s expanding market of 49 million consumers to a full range of U.S. goods and services, from autos to telecommunications. More of high standing, it would join the weight of FTA obligations to the efforts of U.S. companies to penetrate the Korean market, an objective that has been impeded by concerns over transparency and open passage. The U.S. International Trade Commission has estimated that the reduction of Korean tariffs and tariff-rate quota provisions on goods’ market interview would add $10 billion to $12 billion to the U.S. annual gross domestic product.

Until this month, prospects for approval in South Korea appeared considerably more certain than in the U.S. Seoul had submitted the agreement to the National Assembly last September and again in an extra legislative session in February, with the direct of completing ratification in a short time. But the furor in addition a separate agreement to resume U.S. beef imports caused the United Democratic Party to balk, and Korean approval of the FTA is not at all longer a clear prospect.

Modification of the beef agreement could restore the momentum. But no matter what happens in Seoul extremely the next several weeks, the beef-induced hiccup in continuance the FTA will almost certainly lessen the chances for U.S. approval. That’s because, on the U.S. faction, the KorUS FTA is the last of the three pacts slated because of consideration by Congress, following the Colombia and Panama deals. With the U.S. Presidential appointment by vote in full swing, getting any of these FTAs through the Congress will be difficult. If Korea asks for trade-offs in the beef deal to direct domestic misgivings, the already-narrow window for process upon the body the KorUS FTA will shrink to a sliver.

Both President Bush and President Lee Myung Bak have reiterated their commitment to clasp for KorUS FTA approval before Bush’s term ends in January. That normally would make necessary a congressional voice of approval no later than July or August, since both houses of Congress will adjourn for the election season by in good time October. Accordingly, the nearest few weeks are likely to determine whether KorUS FTA will take effect or power of determination be set aside for handling by the nearest President, either Democrat Barack Obama or Republican John McCain.

But the chances of ratification have diminished to near zero, of the same kind with the U.S. recession weakens support for free-trade initiatives. And with the Seoul flesh of neat-cattle protests on the front pages of U.S. newspapers this week, the in posse notwithstanding a quiet deal between the Bush White House and congressional Democrats to move the Korean agreement forward appears to have evaporated.