By Ren Yi Hooi, BASC Research Assistant
As highlighted by the Washington Post and CNN, the US and South Korea have finally completed talks on their free trade agreement, which has seen unending controversy since 2007. This deal was reached after key concessions were granted by both sides, including a major reduction of tariffs on US auto imports on the part of South Korea and the waiving of US demand for complete access to the South Korean beef market.
Although it met with strong criticism from Public Citizen, an advocacy organization which claimed that the FTA would cause widespread job losses, it appeared to satisfy most US automakers that had previously held out against the deal. Business leaders such as Jeffrey Imelt, CEO of GE, also lauded the agreement for promoting both US economic and strategic interests. Various Korean sources reacted positively to the agreement as well.
The closure of the KORUS FTA not only paves the way for an expansion of trade between both countries, but also signals a strengthening of their bilateral alliance at a critical time marked by North Korea’s attack on South Korea. It is could thus be seen not only as an economic move, but one influenced by political motivations. The FTA will enter into force once –and if– it is ratified by the US Congress.