A bilateral trade deal between South Korea and the US will be signed in Washington on Saturday, meeting the deadline to fast-track through the US Congress, after the two countries agreed on last-minute tweaks to the accord.
With bilateral trade exceeding $70bn a year, the pact will be Washington’s largest since the North American Free Trade Agreement more than a decade ago. But parts of the deal, agreed in April, had to be hurriedly renegotiated to meet Washington’s new guidelines on labour rights and the environment.
Han Duck-soo, South Korea’s prime minister, on Friday told local media that the two sides had agreed to change parts of the agreement.
“If the amendments aren’t reflected in the agreement, the South Korea-US FTA may not be endorsed by the US Congress,” Mr Han was quoted as saying in a statement released by the ministry of foreign affairs and trade. The details of the renegotiation were not available in Seoul on Friday.
“South Korea also decided to accept the US demand to block further requests by the US Congress on automobiles, rice and other items,” Mr Han said. “Practically speaking, the changes aren’t so burdensome to us.”
Susan Schwab, the US Trade Representative, and Kim Hyun-chong, South Korea’s trade minister, are due to sign the agreement at 10am Saturday in Washington.
The deal now has to be ratified by Congress in Washington and by the National Assembly in Seoul, but if signed Saturday it will meet the deadline for fast-tracking through the US Congress with a simple yes or no vote.
The Democrat-controlled Congress and the White House last month agreed on a bipartisan deal that sets labour and environmental standards for all free trade agreements, including those with Korea, Peru, Colombia, and Panama.
Democrats had demanded the inclusion of enforceable international labour standards in pending trade agreements and tougher environmental standards and improved access to life-saving medicines in poor countries – despite pharmaceutical companies’ protests of infringement of their intellectual property rights.
Meanwhile, strikes in opposition to the agreement continued in Korea on Friday, with 43,000 union members at Hyundai Motor, the country’s biggest automaker, downing tools for a second day. They stopped work for four hours on Thursday and six hours on Friday, resulting in an estimated loss of production of 4,893 vehicles worth Won69.4bn.
Hyundai Motor shares closed 1.48 per cent lower at Won73,000 on Friday.
The government had threatened to step in to stop the strike, which it said was illegal because the grievance was not related to working conditions. However, after the strike was scaled back to two days from the five initially planned, the authorities allowed it to go ahead.
The Korean workers’ claim that the free trade deal threatens their jobs is ironic as major US automakers are unhappy with the deal, saying market access is lopsided in favour of Korean car makers. Democrats including Hillary Clinton have vowed to vote against the deal.
