Korea, U.S. activate FTA committees

WASHINGTON (Yonhap News) ― South Korea and the United States launched a ministerial consultation channel Wednesday on implementing their bilateral free trade agreement.

“We established a very effective and efficient communication channel between the two countries in managing KORUS FTA,” Korean Trade Minister Bark Tae-ho said at a forum hosted by the Peterson Institute for International Economics.

He was referring to the first Joint Committee meeting with U.S. Trade Representative Ron Kirk in Washington earlier in the day.

The committee is mandated under the KORUS FTA, which took effect in March. The ministerial mechanism is tasked with supervising the operations of 19 subcommittees and working groups aimed at the smooth implementation of the accord, including solving disputes over interpretations of the terms.

“Basically speaking, we established the highest level of channel. By having the first meeting of the Joint Committee, we opened all of the related committees and working groups. So, whenever they want they can meet now without an administrative decision,” Bark said.

He added, “We didn’t talk about any specific issues.”

The minister said the matter of beef imports was not on the agenda.

The South Korean government has come under pressure from opposition parties and other critics to suspend imports of American beef following a case of mad cow disease in California last month.

Bark reiterated that Seoul has maintained a “very cautious position” on the issue, which he said has become a volatile topic ahead of the December presidential elections.

On the investor-state dispute clause in the KORUS FTA, Bark said it will be handled in the service and investment committee, to convene in the coming weeks.

South Korea’s opposition parties claim this investment safeguard mechanism undermines South Korea’s legal independence by allowing U.S. companies to take action against Seoul’s policy decisions.

They demand Seoul address the concern by altering relevant clauses that they argue unfairly favor American firms with long experience in legal battles against a foreign government.

Bark stressed he would not use the word “renegotiation” with regard to the clause, saying the term “discussions” is preferred.

He pointed out that, thanks to the FTA with the U.S., South Korea has bought lots of time to monitor the development of negotiations on the U.S.-led Trans-Pacific Partnership free trade talks and analyze possible gains and losses.

KORUS FTA “gives Korea the advantage of being in a discretionary position regarding the ongoing TPP negotiations,” he said.

The U.S. is negotiating with eight partners ― Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam, which all have trade accords with South Korea.

Bark said the U.S. has not requested South Korea’s participation in the TPP process yet, with only an information exchange under way.

The veteran economist and professor turned minister predicted that various types of economic integration will progress in East Asia in parallel with the TPP negotiations.

“Between the ‘East Asia pact’ and the ‘Trans-pacific pact,’ which one make faster progress, depends on the political commitment of participant countries,” he said. “The possibility of an overarching ‘Free Trade Area of the Asia-Pacific’ may be on the longer-term horizon.”

In early May, South Korea announced the start of FTA talks with China. At a trilateral summit meeting in Beijing last week, the leaders of South Korea, China, and Japan agreed to launch negotiations on a three-way FTA this year.

On his first trip to the U.S. since taking office in December, meanwhile, Bark also met with Deanna Tanner Okun, head of U.S. International Trade Commission.

He is scheduled to have meetings with U.S. Commerce Secretary John Bryson and Max Baucus, chairman of the Senate Finance Committee, on Thursday.