The Korea-U.S. free trade agreement reached last year will boost the Georgia economy if ratified by both countries’ legislatures, the U.S. trade official responsible for negotiating the deal said in Atlanta.
Wendy Cutler, the assistant U.S. trade representative for Japan, Korea and Asia Pacific Economic Cooperation affairs, said she hopes the landmark agreement will overcome hurdles and pass Congress and the South Korean National Assembly as early as this summer.
Georgia’s exports to South Korea, the state’s 12th largest market in 2006 and the base for many companies investing substantially here, would only increase if and when that occurs, she said.
The complex 300-page, 24-chapter agreement is the fruit of eight rounds of formal negotiations over a 10-month period. It was signed by both governments on June 30, 2007.
Ms. Cutler called it the “most commercially significant FTA the U.S. has concluded in 15 years” would eliminate or reduce tariffs on machinery, computers, electronics and chemicals, top products in Georgia’s $400 million of annual exports to South Korea.
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Also, Korean investors in Georgia would encounter fewer barriers, a fact Ms. Cutler said should resonate with the more than 100 Korean businesspeople, lawyers and public officials at a luncheon organized by the Gwinnett County Chamber of Commerce and Korean organizations at the Commerce Club on Broad Street. Automaker Kia Motors Co.’s $1.2 billion investment in West Point is the best-known but not the only company in the state that would benefit from a less-regulated trade environment, she said.
The parade of Kia suppliers setting up shop in Georgia and Kumho Tire Co., which announced a $225 million plant in Macon last month, could also take advantage of the easy flow of trade and investment expected under the agreement.
“It’s clear that Georgia’s business community and its workers have a lot at stake in the Korea-U.S. FTA and will see a lot of opportunities upon its entry into force,” Ms. Cutler said.
Gwinnett County, home to about half of the state’s Korean population, has a particular interest in seeing that take place, according to Nick Masino, the Gwinnett chamber’s vice president.
The county has a high concentration of Korean small businesses and is looking to attract the headquarters of larger companies that could come to Georgia if the agreement is implemented.
But the pact still faces obstacles in both countries. U.S. automakers oppose it, saying further market liberalization would injure the domestic auto industry. While America has been open to Korean goods, South Korea has traditionally been closed to American cars, Ms. Cutler acknowledged.
Disputes about South Korea’s decision to block U.S. beef from entering the Korean market also keep some members of Congress from offering their approval.
Despite use of free trade as an “easy scapegoat” for economic woes during this presidential election season, Ms. Cutler said U.S.-commissioned studies have projected huge benefits for both economies.
A September report said the U.S. could see $10 billion added to its gross domestic product and $10-$12 billion more in exports, while South Korea could experience a 2 percent increase in GDP and as many as 100,000 new jobs, she said.
Kwang Jae-Lee, South Korea’s consul general in Atlanta, said in remarks preceding Ms. Cutler that preferential market access is especially important from the Korean side in making sure the benefits are mutual.
“To Korea, this FTA represents an opportunity to get access to the largest and most competitive economy in the world, namely the U.S.,” he said.
But allowing the U.S. unfettered access to the Korean market also important, especially for Georgia, Kathe Falls, director of international trade at the Georgia Department of Economic Development, told GlobalAtlanta.
“Free trade agreements are incredibly important because a lot of what we’re hearing about is really leveling the playing field for the U.S.,” she said, noting that Korea is a top partner in trade, tourism and investment.
Sunny Park, CEO of General Building Maintenance and secretary and treasurer for the Georgia Ports Authority, told GlobalAtlanta that any free trade agreement would increase trade volume flowing through Georgia’s ports.
Recent protectionist comments by political leaders won’t be able to stem the rising tide of globalization, he said, and Georgia needs to prepare for the agreement’s implementation.
“We cannot stop this trend, so I’d rather suggest we ride the wave and take advantage of it,” he said.
Ms. Cutler said the U.S. cannot afford to be “sitting on the sidelines” as Asian countries negotiate free trade agreements with one another.
With newly elected president Lee Myung-bak an outspoken advocate of free trade, she hopes that the Korean legislature will pass its side of the agreement and force the U.S. Congress to address it with a vote as early as this summer.