The United States and South Korea signed a free trade agreement on Saturday that will face tough opposition in the U.S. Congress because of Democratic Party concerns that it will cost auto industry jobs.
The pact, which needs to be approved by both countries' legislatures, is the biggest such U.S. deal since the North America Free Trade Agreement 15 years ago. Two-way trade between the United States and South Korea, its seventh largest trading partner, is about $80 billion annually.
President George W. Bush called on Congress to ratify the agreement, saying it would boost export markets for U.S. farmers, ranchers and factories.
The agreement will also further enhance the strong United States-Korea partnership, which has served as a force for stability and prosperity in Asia, Bush said in a statement issued from Kennebunkport, Maine, where he is spending the weekend at his parents' summer home.
The agreement concluded on April 1 after 10 months of tough negotiating phases out tariffs on nearly 95 percent of two-way trade in consumer and industrial products within three years.
It immediately eliminates duties on more than half of U.S. farm exports to South Korea and expands business opportunities for U.S. service providers in sectors ranging from banking to telecommunications to express delivery.
Top Democrats, including House of Representatives Speaker Nancy Pelosi of California and leading presidential candidate Sen. Hillary Clinton of New York, have denounced the deal because of its auto provisions.
They complain that it opens the U.S. market to more South Korean cars while failing to tear down non-tariff trade barriers that they blame for a huge imbalance in automotive trade between the two countries.
Bush administration officials say the pact does tackle barriers that have blocked U.S. car exports and immediately eliminates Korean tariffs on a number of U.S. cars and trucks. It also contains a mechanism to reimpose U.S. auto tariffs if South Korea violates its side of the pact.
U.S. Trade Representative Susan Schwab acknowledged opposition to the pact, but said it would not be changed.
I want to affirm that this agreement, once signed, will stand on its own without amendment, she told an audience of U.S. and South Korean officials and lobbyists.
U.S. business groups outside the auto sector are ready to make a strong push for Congress to approve the pact. But some fear it could be delayed until after the 2008 U.S. elections.
The Korean agreement was the last trade deal to be signed before the expiration of Bush administration's trade promotion authority at midnight on Saturday after five years in force.
That legislation has allowed the White House to negotiate trade deals Congress must approve or reject within 90 days of receiving them without making changes.
By signing the pact on Saturday, it has that protection no matter when the White House submits it to Congress. South Korea's National Assembly also must approve the pact.
Many farm state lawmakers -- including Senate Finance Committee Chairman Max Baucus of Montana -- have tied their support for the agreement to South Korea fully reopening its market to U.S. beef, which was shut after mad cow disease was found in U.S. cattle in December 2003.
Seoul has begun accepting some U.S. beef, but not from cattle older than 30 months or cuts containing bones.
U.S. agriculture officials say there is no scientific reason now for South Korea to ban any U.S. beef imports.