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Mon, Jul 02, 2007 - Page 10 News List

US, S Korea sign free-trade agreement

JUST IN TIME In Seoul, thousands of striking metal workers were joined on Friday by students and farmers to protest the trade accord, which they say will harm livelihoods

AP , WASHINGTON

The US and South Korea have signed a free-trade agreement that reflected US calls for stricter labor and environmental standards.

South Korean Trade Minister Kim Hyun-chong and US Trade Representative Susan Schwab signed the agreement in Washington on Saturday, meeting a deadline under US President George W. Bush's expiring "fast track" special trade powers.

That "fast track" authority prevents lawmakers from amending the deal before voting on it. The trade deal still needs to be approved by lawmakers in both countries to take effect.

Bush said on Saturday that the South Korean agreement would generate exports for US farmers, ranchers, manufacturers and service suppliers. He urged Congress to ratify the agreement.

While the US Chamber of Commerce and other business groups applauded the agreement, it faces opposition in Congress. House leaders, including Speaker Nancy Pelosi, a Democrat, say they will not support the agreement as negotiated.

The agreement would eliminate and lower tariffs and other trade barriers in a wide range of industrial goods and services, including automobiles, agricultural products and financial services.

South Korea also agreed to change its tax system for larger vehicles, which the US contended was discriminatory. South Korea currently sells more than 700,000 vehicles a year in the US, while US makers only sell about 5,000 in South Korea.

South Korea is the US' seventh-largest trade partner. Bilateral trade between the two countries last year reached US$78 billion.

The two countries concluded the free-trade agreement in April after 10 months of tough negotiations, only to have it hung up over last-minute amendments requested by Washington. The amendments incorporate stricter labor and environmental guidelines set by the new Democratic majority in Congress for free trade deals.

In Seoul, South Korean President Roh Moo-hyun said the amendments "would not greatly hurt [South Korea's] interests."

The new US guidelines for labor and environmental standards are "terms that, in principle, have to be followed in view of both international regulations and domestic regulations," Roh said.

The two governments say slashing tariffs and other trade barriers will boost commerce between the two close allies. But opponents say the deal will squeeze workers in both countries.

In central Seoul, thousands of striking workers were joined on Friday by students and farmers to protest the trade accord, which they say will harm livelihoods.

Chong Hye-won, director of the international department of the Korean Metal Workers' Union, said around 20,000 protesters were at the scene, mostly members of her union. A police estimate was not immediately available.

Some 110,000 members of the 150,000-strong KMWU walked off the job for a second day on Friday in opposition to the free trade deal, Chong said.

The union is South Korea's largest, and includes workers of large companies such as Hyundai Motor Co.

The US also concluded free trade deals with Colombia, Panama and Peru ahead of Saturday's deadline.

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