Amcham Korea March Ppp

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*The US-Korea Free Trade Agreement

How to Promote Your Interests

Amy JacksonC&M Internationalamyjackson@crowell.comT: (202) 624-2501F: (202) 628-5116

March 2006


AgendaOverview of the US Governments FTA Policy:Things to Watch

What is needed for Success of the US-Korea FTA?

What You Can DoThe U.S.-Korea FTA: How to Promote Your Interests


Things to WatchFTAs are here to stay, so make the best of them

Competition for scarce resources

Short time to negotiate complicated deal

Politics, Politics, Politics

The U.S.-Korea FTA: How to Promote Your Interests


US Free Trade Agreements: 12 CompletedThings to Watch: FTAs are here to stay

Since 1985






MoroccoRecently Concluded

Australia (Feb 2004)

CAFTA-DR (Aug 2004)

Bahrain (Sep 2004)

Oman (Oct 2005)

Peru [Andean] (Dec 2005)

Colombia [Andean]] ( (Feb 2006)


US Free Trade Agreements: 11 ProposedThings to Watch: FTAs are here to stayMiddle East

EgyptKuwaitSaudi ArabiaQatarLatin America



Korea (Launched February 2, 2006)

Malaysia(Launched March 8, 2006)




South African Customs Union (SACU)



US Free Trade Agreements: 8 OngoingThings to Watch: Competition for Scarce Resources


The Role of Trade Promotion Authority (TPA)Things to Watch: Short time to negotiate a complicated dealTPA grants the President the authority to negotiate international trade agreements that cannot be revised by Congress, but can only be approved on an up-down vote. This was previously known as fast-track authority

The Presidents TPA lapsed in 1994 but was renewed in 2002. Since then, the US has passed 6 FTAs under TPA rules.

After being extended in 2005, TPA is set to expire on July 1, 2007. The Administrations goals is to conclude all FTAs currently under negotiation by March 31, 2007: Korea, Thailand, Malaysia, UAE, Ecuador, SACU, FTAA.COMPREHENSIVE TPA requires specific consultations with Congress on agriculture, fish and shellfish, textiles, trade remedies, etc.EXTENSIVE CONGRESSIONAL INVOLVEMENT The Executive Branch maintains extensive dialogue with Congress throughout the process


Politics, Politics, PoliticsThings to WatchUS-Korean elections

local national

US domestic debate on Trade

developments on DDA developments related to other FTAs developments related to TPA expiration

Squeaky wheels


What is needed for success of the US-Korea FTA?The U.S.-Korea FTA: How to Promote Your InterestsMacro-level Factors

US-Korea FTA Too Big to Fail?

Presidential Approval/Involvement

Comprehensive in scope

No Foreign Policy Blow-ups

No FTA issue becomes Too hot to handle

Congress/National Assembly


General US Goals and Desired OutcomesWhat is needed for success of the US-Korea FTA?GeostrategicCommercialPolitical Does the FTA partner cooperate with the US on foreign affairs and security issues?

Will the FTA contribute to other Administration objectives in the region? Will the FTA be comprehensive and bring commercially meaningful benefits to US farmers, businesses and consumers?

Does the US business community support the FTA?

Does Congress support the FTA?

Will FTA negotiations help resolve existing bilateral issues of concern? The US-Korea FTA is the Perfect Storm

Is it Too Big to Fail?


Korea is:

The worlds 10th largest economy

7th largest U.S. Trading Partner

6th largest market for U.S. ag exports

The U.S.-Korea FTA will:

Be the largest U.S. FTA since NAFTA in 1993

Have huge commercial implications for virtually every sector

Economic BenefitsWhat is needed for success of the US-Korea FTA?

Top U.S. Exports to KoreaTop 5 U.S. Imports from KoreaElectric Machinery, Sound/TV equipment, etc.Electric Machinery, Sound/TV equipment, etcNuclear reactors, boilers, machineryAutosOrganic chemicalsNuclear reactors, boilers, machineryOptic, photo and medical instrumentsMineral fuel, oil, etc.Aircraft, Spacecraft and Parts thereofIron and Steel Articles$27.6 billion in 2005$43.8 billion in 2005


Approval/Involvement at the highest levelAn FTA with Korea will provide important economic, political, and strategic benefits to both countries and build on America's engagement in Asia.

February 2006 Korea is a large and advanced economy.

Korea is an important ally of the US.

The FTA more firmly establishes US in Asia in light of Chinas growing economic influence.What is needed for success of the US-Korea FTA?


It is essential that we conclude an FTA with the United States for the future of our economy.

January 2006

We must not allow any domestic interest groups to foil the negotiationswe should be aware that the negotiations could fail depending on the terms of the negotiations. For it is possible that there may be an ultimate condition that we could not yield to.

March 2006 The purpose of the FTA is to enhance competitiveness and lead us to a world-class economy.

The FTA strengthens alliance with US.

The Korea-U.S. FTA is a matter of pride for the Korean people.Approval/Involvement at the highest levelWhat is needed for success of the US-Korea FTA?


FTAs Are Comprehensive Market Access [tariff reduction] [ Textiles and Apparel Rules of Origin Customs Administration Sanitary and Phytosanitary Measures Technical Barriers to Trade Safeguards Government Procurement Investment

Cross-Border Trade in Services Financial Services Telecommunications Electronic Commerce Intellectual Property Rights Labor Environment Transparency Dispute Settlement

What is needed for success of the US-Korea FTA?Typical FTA Chapters:


Macro-level FactorsWhat is needed for success of the US-Korea FTA?Wild Card: No Foreign Policy Blow-Ups

Six Party Talks

US military incidents



Wild Card: No FTA Issues Become Too Hot to Handle

Korean Side

Macro-level FactorsWhat is needed for success of the US-Korea FTA?Reactive based on events in Korea

Private sector views on outcome of negotiations

US must haves/ must not haves

Sugar in CAFTA What (if anything) will IT be in US-Korea FTA?

Korean must haves/ must not haves

Protestors? How many / How vocal / How extreme

Rogue ministries Refusal to negotiate?

Inflammatory Press

Pre-presidential election politicsKorean Side Throughout the ProcessUS Side Primarily at the end of the Process


Issues of interest to Korean industry are not well-known

Political Issues

Movement of Natural Persons (visa issues)

Kaesong Industrial Complex

Anti-dumping RulesIssues Too Hot to HandleWhat is needed for success of the US-Korea FTA?


The US Visa Waiver Program (VWP) Issues Too Hot to HandleThe U.S. will work with the ROK to develop a visa waiver program roadmap to assist Korea in meeting the requirements for membership in the program. Korea's interest in participating in the VWP reflects our strong bilateral partnership and will contribute to enhance exchanges and mutual understanding.President Bush November 2005A major issue for business

To respond to the increased demand for visas, Congress established the VWP in 1986.

VWP allows citizens from designated countries to enter the US for short periods of time without the required visitors visa.

Over time it has expanded to encompass 27 countries, including five Asia-Pacific nations: Australia, Brunei, Japan, New Zealand and Singapore.Red tape in visa applications is costing business opportunities between Korea and the U.S. Even the tiny nation of Andorra, which hardly has any trade with the U.S, is included among the 27 countries whose citizens do not need a visa for shorter trips to the U.S. Representative Diane Watson (D-CA) February 2006


Wild Card: Congress (and National Assembly)

Recent hearings Effect of FTAs on Autos Labor issues

Role of Korea Caucus

TPA Expiration

Lessons learned from CAFTA

Macro-level FactorsWhat is needed for success of the US-Korea FTA?Dont underestimate their role. Let them know you care throughout the process.


What You Can Do: Role of individual companiesThe U.S.-Korea FTA: How to Promote Your InterestsDevelop a Comprehensive Outreach Strategy NOW1Dont underestimate your ability to influence2Watch developments carefully3Take advantage of opportunitiesThink Strategically4Be VocalMake your needs known throughout the process5Be