WASHINGTON — Rep. Erik Paulsen has been named co-chair of the new working group for the Korea Free Trade Agreement (KORUS), which has proposed to eliminate 95 percent of tariffs between the United States and South Korea within three years.
“A free trade agreement will grow business and create jobs here in the U.S.,” Paulsen said. “At a time when unemployment is at record highs we need to do everything possible to grow our economy.”
Paulsen aims to restart the initiative for this trade agreement which has stalled on concerns from the auto and beef industries that it will hurt fair trade.
KORUS was signed by the United States and Korea three years ago and is still pending. Legislation to ratify the agreement is expected to enter the House as a bill before it would need to move on to the Senate for a vote.
South Korea is the fifth largest market for agriculture products for Minnesota and the sixth largest agriculture market for the United States. In 2006, Minnesota had over $500 million in exports to South Korea in everything from machinery to medical devices. South Korea is the United States’ eighth largest export market, and federal officials project that KORUS would add about $10 billion in economic activity in the United States.
South Korea’s U.S. ambassador, Duk-soo Han, emphasized on Wednesday the economic, strategic and geopolitical importance of the agreement and vowed to get it passed.
“This agreement is so important that we will be able to make it and we will do it in time,” Han said.
President Obama pledged at last week’s G-20 summit to act on this pending agreement and gave a boost to the initiative’s platform. KORUS largely follows in the footsteps of the North American Free Trade Agreement (NAFTA) and would be the largest trade agreement made by South Korea.
But concerns linger about outsourcing labor to countries with poverty-level wages and increasing unfair competition for companies at home that face greater regulation than their international competitors. Concerns have been raised by some industries, both in the U.S. and South Korea.
“We are opposed to the Korea Free Trade Agreement as it is written. It has a lot of NAFTA copycat provisions that are not a good way to fulfill the fair trade promises made by President Obama while has on the campaign trail,” said Jessica Lettween, executive director of the Minnesota Fair Trade Coalition. “The biggest issues that have been on the forefront are the imbalances of auto exports and imports and our beef exports to Korea.”
Proponents of fair trade have introduced the Trade Act in the House which aims to create a standard for trade between the United States and all other the nations. All five Minnesota Democrats — Reps. Keith Ellison, Betty McCollum, Jim Oberstar, Collin Peterson and Tim Walz — have co-sponsored that bill.
Lauren Knobbe is an intern in MinnPost’s D.C. bureau.