Beef deal revives hope for U.S.-Korea trade pact
WASHINGTON (Reuters) - A deal to allow U.S. beef exports back in the South Korean market boosts chances Congress will vote on a free trade pact with Seoul, but House of Representatives Speaker Nancy Pelosi and other Democrats said on Friday the pact's auto provisions should be revamped.
"What it does is it gets us back in the game," said Myron Brilliant, president of the U.S.-Korea Business Council. "It allows the business community to go up to Capitol Hill and say 'we've got this beef issue behind us and we want you to pay a lot more attention to what's in this free trade agreement."'
"Time will tell whether the politics will allow us to get it taken up this year. But we weren't even at the table ... Now the agreement becomes much more ripe for consideration. And that's a big step forward," Brilliant said.
The U.S. International Trade Commission estimates the Korea-U.S. free trade agreement, or KORUS, could raise U.S. exports by an additional $10 billion to $12 billion, making it the biggest U.S. trade deal in 15 years.
But it has been dead in the water in Congress almost since it was signed on June 30, 2007, because of beef trade problems with South Korea dating back to the discovery of the first case of mad cow disease in the United States more than four years ago.
Senior farm state lawmakers -- including Senate Finance Committee Chairman Max Baucus, a Montana Democrat, have warned the White House not to submit the agreement for congressional approval until South Korea fully reopened its market to U.S. beef.
In addition, many Democrats -- including presidential hopefuls Barack Obama and Hillary Clinton -- have criticized the agreement, which they say fails to tear down South Korea's "non-tariff barriers" to U.S. automobiles while opening the U.S. market to more South Korean cars.
'PROOF IS IN THE PORTERHOUSE'
The beef agreement reached on Friday in Seoul sets the stage for trade to resume in mid-May.
Baucus, whose committee has jurisdiction over trade agreements, said in a statement he would be closely monitoring implementation of the beef deal.
"The proof is in the porterhouse ... I expect great results," Baucus said.
Meanwhile, a spokesman for House Speaker Pelosi said the administration should not send the trade agreement to Congress until both the beef and auto issues are resolved.
"The Speaker looks forward to a resolution of those issues before the agreement is sent to Congress for approval," Pelosi spokesman Brendan Daly said in an email.
Last week, President George W. Bush sent a free trade agreement with Colombia to Congress against Pelosi's advice and triggered a showdown that has left that pact in limbo.
Michigan Democrats Rep. Sander Levin and Sen. Debbie Stabenow also warned that the beef deal would not be enough to persuade lawmakers to approve the pact.
"A last minute, unenforceable, untested, agreement on beef is not enough to satisfy Congress. The problem with this FTA has always been broader than beef -- it is the agreement's basic acquiescence to Korea's one-way street in manufacturing trade that is also unacceptable," Levin said.
The Bush administration defends the agreement's auto provision, which they say will do much to open South Korea's market to more U.S. auto exports.
U.S. Trade Representative Susan Schwab has previously ruled out renegotiating the Korean agreement's auto provisions and in a statement on Friday gave no indication the Bush administration was reconsidering that stance.
"The major obstacle to congressional consideration of the United States-Korea Free Trade Agreement is removed. The administration will now work in earnest with Congress and the U.S. agriculture, manufacturing, and services sectors to pass the KORUS FTA," Schwab said.
(Editing by Vicki Allen)
