Korea Accelerates Free Trade Negotiations with European Union As U.S. Deal Languishes
The European Union and South Korea last week completed the outline of a free trade agreement which appears to be on track for swift approval by the European Commission- possibly by the end of this year. In contrast, the Korean-U.S. Free Trade Agreement (FTA) was signed in June 2007 but still awaits Congressional approval. The Korean government is also seeking similar FTAs with Canada, Australia and India, suggesting that Korean industrial companies may focus on those regions if trade there becomes more profitable than in the U.S. While much of the U.S. concern about the Korean FTA deals with its impact on the automobile industry, the impasse has an impact on the consumer electronics industry - especially in categories, such as flat-panel TVs and mobile handsets, where big Korean companies are among the top five suppliers in the U.S.
Speaking in Seoul last week, former President George W. Bush voiced regrets about the delay in approving the pact. Bush attributed the two-year impasse on protectionism in Washington, not on anti-Korean sentiment.
Just prior to Bush's appearance in Seoul, the South Korean ambassador to the U.S. Han Duck-soo appealed to Congress to approve the bilateral free trade deal, saying it will serve as "the cornerstone of strengthened partnership and friendship in the future." He also said, "It will truly reinforce our already strong alliance relationship."