Cars hold up S. Korean trade deal
ULSAN, South Korea -- All shined up with nowhere to go, hundreds of new Hyundai vehicles languish on the docks of one of the world's largest auto factory complexes.
Touring the piers, company spokesman Oles Gadaczsays twice as many cars are awaiting a quick trip aboard nearby transport ships headed for the U.S. and Europe compared with a couple years ago. Many of them are SUVs, such as the Veracruz or Santa Fe, that the factory has temporarily stopped producing because there isn't enough demand right now in the U.S.
The troubles in Ulsan underscore how the auto industry's problems are global. But until business improves, South Korean trade officials have a proposal they say could jump-start trade that has already fallen 30% or more: a free trade agreement with the U.S. that they argue is mutually beneficial.
"This is a win-win for both countries," Gadacz says. "We invite the competition."
A proposed U.S.-South Korea Free Trade Agreement was hammered out in 2007 by the Bush administration. The deal could boost U.S. exports to South Korea by at least $9.7 billion a year and increase South Korean imports by $6.4 billion or more, the U.S. International Trade Commission estimated at the time. The proposed pact recently passed muster with a South Korean parliamentary committee and awaits action in the U.S. Congress. Similar free trade agreements with Panama and Colombia are on deck as well.
Despite harsh campaign rhetoric last year, especially about the North American Free Trade Agreement with Mexico and Canada, President Obama and U.S. Trade Representative Ron Kirk indicated as recently as April that they are open to free trade deals — with likely modifications.
While South Korea's is potentially the biggest of the three — it is America's seventh-largest trading partner — it's also the thorniest. Smoothing the ability of American firms to sell in South Korea could benefit industries ranging from beef to pharmaceuticals and aircraft. But the holdup centers on the product for which Hyundai is best known: all those cars.
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