WASHINGTON — More than 10 months ago, top U.S. and South Korean trade officials, surrounded by reporters and cameras and backed up by lawmakers at the Capitol, launched talks for a free trade agreement.
Five rounds of negotiations later, much remains to be agreed upon, including determining how textiles and apparel will be dealt with if a signed agreement is to be considered by Congress.
Textile and apparel imports from South Korea rose 5.9 percent to 2.16 billion-square-meters equivalent for the year ended Oct. 31, according to the Commerce Department’s Office of Textiles & Apparel. Those imports were valued at $1.7 billion.
“It’s time to roll up our sleeves and get the [free trade agreement] done,” Commerce Secretary Carlos Gutierrez said in a speech to the American Chamber of Commerce in Korea in Seoul last week. “The clock is ticking. The president’s trade promotion authority is set to expire at the end of June.”
The renewal of that authority, which gives U.S. Trade Representative Susan Schwab more latitude in putting together trade deals because she can submit them to Congress for a vote without legislators being able to amend them, is uncertain. The talks with South Korea were launched by Schwab’s predecessor, Rob Portman, who is now federal budget director.
However, enough progress was made during the fifth round of negotiations, most of which were held in Big Sky, Mont., during the week of Dec. 4, to sustain momentum. Still, serious differences remain on the handling of trade in automobiles and pharmaceuticals.
“I’m doing everything I can, working with my team of [about] 100 negotiators to conclude this agreement by early next year,” said Wendy Cutler, assistant USTR and chief negotiator.
The textile talks were held here by special textile negotiator Scott Quesenberry, and Cutler said there were no breakthroughs. Textile issues are often the last to be worked out in free trade treaties.
“The core issues on the table in the textile negotiating group…[have] to do with tariff elimination, the rules of origin, an effective safeguard mechanism and effective anticircumvention procedures,” Cutler said on a conference call with reporters. “All these issues were touched upon. This is the first meeting of the senior level.”
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Cutler said that the next round of talks would be held in South Korea the week of Jan. 15, and that a seventh round likely would be necessary.
“Things are starting to get a little bit difficult,” said Daniella Markheim, senior analyst for trade policy at the Heritage Foundation. “It’s the trouble spots of pharmaceuticals and automobiles, those are key and they’re not really moving.”
Although U.S. textile firms are often wary of free trade agreements because by lowering duties they can create more competition, Markheim argued that such accords are a way for American companies to benefit.
“Countries are going to need to band together to create the economies of scale that are going to let them compete in this industry,” she said, adding that free trade pacts can make building strategic partnerships and alliances easier.
“Yes, it increases access into each other’s markets for exports, but for the long term, the real growth is going to come out of making those partnerships that will enable companies in both countries to do more and do better in all markets.”