De­spite ac­cord, ‘Made in the USA’ no driv­ing force for South Kore­ans

The Washington Times Daily - - Front Page - BY DAVE BOYER

“Not that pop­u­lar,” Mr. Shin said. “We have a feel­ing that they re­quire a lot of fuel. And if you com­pare to the Euro­pean cars, the de­sign is not that great.”

Such sen­ti­ments here on U.s.-made goods could com­pli­cate the path for the Korean-u.s. free-trade agree­ment, which went into ef­fect March 15, just be­fore Seoul hosted Mr. Obama and more than 50 other heads of state and gov­ern­ment at this week’s nu­clear se­cu­rity sum­mit. Mr. Obama, hop­ing to en­er­gize his union base and boost the econ­omy, is fond of say­ing that the long-sought trade deal will help the U.S. auto in­dus­try by in­creas­ing ex­ports.

“Thanks to the bi­par­ti­san trade agree­ments I signed into law with you

in mind, there will soon be new cars on the streets of South Korea im­ported from Detroit, Toledo and Chicago,” he told a United Auto Work­ers con­ven­tion in Washington in Fe­bru­ary.

South Korea each year ex­ports more than 400,000 ve­hi­cles, mostly Hyundais and Kias, to the U.S. But the U.S. sells fewer than 10,000 cars per year to South Korea, the world’s 15th-big­gest econ­omy with a gross do­mes­tic prod­uct of nearly $1.2 tril­lion. Mr. Obama says the free-trade agree­ment will help cor­rect that im­bal­ance.

At a news con­fer­ence in Seoul on Sun­day with South Korean Pres­i­dent Lee Myung-bak, Mr. Obama said the agree­ment “is a win for both of our coun­tries — more jobs and op­por­tu­ni­ties for our work­ers and busi­nesses on both sides of the Pa­cific.”

“That in­cludes sup­port­ing some 70,000 Amer­i­can jobs and keep­ing us on track to meet my goal of dou­bling Amer­i­can ex­ports,” Mr. Obama said.

But Kim Dong-ho, a pasta im­porter, said he prefers cars made by Hyundai.

“In my opin­ion, Amer­i­can car is too large,” Mr. Kim said. “As you know, Korea is a small coun­try.”

If Mr. Obama’s goal of dou­bling ex­ports is at­tained, skep­tics say, U.S. au­to­mo­biles will be a tiny por­tion of that equa­tion.

“I don’t think there’s go­ing to be a mas­sive in­crease in Amer­i­can cars in Korea,” said Vic­tor Cha, chair­man of the Korea pro­gram at the Cen­ter for Strate­gic and In­ter­na­tional Stud­ies in Washington. “They like what they make over there. And they like BMWS and Mercedes, not Cadil­lac” among im­ported lux­ury ve­hi­cles.

An Yong-hin, who works in Seoul for a con­struc­tion com­pany, echoed that sen­ti­ment.

“I like the Kias,” Mr. An said. “For lux­ury cars, most peo­ple I know like the Equus by Hyundai.”

Un­der the trade agree­ment, tar­iffs on U.S. cars fell from 8 per­cent to 4 per­cent. That means, for ex­am­ple, that Ford Mo­tor Co.’s Lin­coln MKS costs about $47,500, down from about $51,100. Gen­eral Mo­tors Co., which owns GM Korea, cut the prices of all Cadil­lac mod­els by up to 3.5 per­cent.

Op­po­si­tion po­lit­i­cal par­ties in Korea are com­plain­ing that the re­vised agree­ment gives pref­er­en­tial treat­ment to U.S. auto man­u­fac­tur­ers. But Mr. Lee, who won rat­i­fi­ca­tion, said the ac­cord will cre­ate “jobs for our work­ers, ex­pand trade and in­vest­ments, and over­all im­prove the lives of our peo­ples.”

An­other loom­ing re­sult of the trade agree­ment that nei­ther na­tion’s pres­i­dent is men­tion­ing is that the U.S. will ex­port more lawyers to Korea.

The agree­ment al­lows U.S. law firms to open up shop in Korea, and sev­eral top-100 firms are rush­ing to tap the mar­ket. Cov­ing­ton & Burl­ing LLP, Washington’s largest law firm, is among them.

“That’s ex­actly be­cause of the [free-trade agree­ment],” Mr. Cha said. “They could not open be­fore the FTA. It’s go­ing to take a few years for them to get up and run­ning, but it’s cer­tainly a big deal for them. It’s a new mar­ket. There’s a lot of busi­ness in South Korea.”

As much as Mr. Obama is talk­ing up the agree­ment with au­towork­ers, trial lawyers are part of his po­lit­i­cal base, too.

U.S. food ex­ports also are ex­pected to rise as a re­sult of the ac­cord.

In a poll of 250 whole­salers and re­tail­ers re­leased by the Korea Cham­ber of Com­merce last month, 29.1 per­cent of re­spon­dents said they will in­crease im­ports of pro­cessed foods from the U.S. About 28 per­cent said they will im­port more fresh food.

Pres­i­dent Obama talks across the ta­ble to Chi­nese Pres­i­dent Hu Jin­tao (third from right) at the start of their bi­lat­eral meet­ing Mon­day in Seoul.

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