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Summary:
On June 30, 2007, trade officials representing the United States and South Korea signed the U.S.-South Korean Free Trade Agreement (KORUS FTA). The negotiations leading to the free trade agreement (FTA) covered a wide range of subjects, including a number of sensitive issues -- autos, agriculture, trade remedies, among others -- that have plagued the U.S.-South Korean trading relationship for decades and these subjects are reflected in the final text of the agreement. Congress will have to approve implementation legislation for the KORUS FTA before it can enter into force. The negotiations were conducted under the trade promotion authority (TPA), also called fast-track trade authority, that the Congress granted the President under the Bipartisan Trade Promotion Act of 2002 (the Act) (P.L. 107-210). The authority allows the President to enter into trade agreements that receive expedited congressional consideration (no amendments and limited debate). The White House has not indicated when it will send the draft implementing legislation to Congress. (The TPA sets no deadline for the President to do this.) However, in a July 2, 2007 statement, House Democratic leaders cited problems with the agreement and indicated they could not support the KORUS FTA "as currently negotiated." The United States and South Korea conducted the FTA negotiations with a high degree of political risk for both countries, and that risk will likely carry over as their respective legislatures debate the merits of the FTA. The KORUS FTA is the product of much compromise. As negotiators from both countries stated, the two sides were able to accomplish some of their objectives, but neither side got everything it wanted. Reactions to the KORUS FTA in both the United States and South Korea have been mixed. U.S. business community views largely reflect perceptions of to what degree the objectives of various groups were realized in the final agreement. In general, the U.S. business community at large -- particularly many financial services firms -- has expressed strong support for the FTA. However, some U.S. automobile manufacturers and major U.S. unions have criticized the agreement. Major agricultural groups have delayed a full response to the negotiations until South Korea agrees to lift its restrictions on imports of U.S. beef, underscoring the political importance of resolving this issue. This report is designed to assist Members of the 110th Congress as they consider the merits of the KORUS FTA. It examines the KORUS FTA in the context of the overall U.S.-South Korean economic relationship, U.S. objectives, and South Korean objectives. The report will be updated as events warrant.
