The US and South Korea concluded a free trade agreement on 1 April, thus opening the door for congressional ratification before the president’s trade promotion authority expires on 30 June. Both countries made a major last-minute concession: the US agreed to leave rice out of the FTA, and Korea accepted to resume imports of US beef once the World Organisation for Animal Health has declared US beef safe. Seoul also agreed to eliminate its 40 percent tariff on beef over the next 15 years.
If ratified by legislatures in both countries – likely to prove harder in the US – the FTA is projected to have the potential to boost bilateral trade by as much as US$29 billion. It would liberalise trade in most industrial products, including automobiles and textiles, and further open up services markets and public procurement contracts. Many US farm products will get greater access to Korea’s traditionally-protected market. The US also obtained a review mechanism for Korea’s drug pricing and reimbursement system. The agreement requires both parties to enforce their own labour laws, but the US Trade Representative has informed Korean authorities that the labour chapter may be reopened once the administration and congressional Democrats reach agreement on changes to US trade policy. Korean officials have publicly stated that they are not prepared to renegotiate the labour provisions.
On 23 April, EU members countries approved negotiating mandates for free trade agreements with India, South Korea and the Association of Southeast Asian Nations (ASEAN). They agreed that the new FTAs “should be ambitious and comprehensive and comprise far-reaching liberalisation of trade in goods and services, and investment.” Other key goals will be to open up public procurement contracts and reduce non-tariff barriers. The biggest gains for EU companies would come from exporting business services to ASEAN and Korea, and manufactured goods to India. ASEAN is projected to boost exports to the EU by 18.5 percent, India by 18.7 percent, and Korea by 36 percent. Talks are expected to start within months.