U.S.-Korea Free Trade Agreement: Potential Economy-wide ... - USITC

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Views of Interested Parties The Industry Trade Advisory Committee on Automotive Equipment and Capital Goods (ITAC 2) and U.S. auto manufacturer General Motors (GM) stated that the expedited alternate dispute resolution process for automotive products has the potential to discourage the use of nontariff barriers. 150 Ford, the Labor Advisory Committee (LAC), the United Automobile, Aerospace, and Agricultural Implement Workers of America (UAW), and U.S. Representative Sander Levin, expressed concerns that U.S. auto firms face the burden of proving that they have suffered “injury” under the alternate dispute resolution process for automotive products before an appropriate trade remedy can be applied. 151 They said that the threat of applying the prevailing MFN applied rate of duty of 2.5 percent would be ineffective and objected to its application only to passenger cars and not to light pickup trucks as well. 152 Moreover, Ford stated that it would have preferred a process in which the MFN duty would be immediately reinstituted at the beginning of the dispute with negotiations to follow. 153 In its report, the LAC stated that the process should allow participation of labor unions and should require the selection of panelists with specialized experience. 154 LAC said that safeguards resulting from this alternate dispute-settlement procedure should be permanent, 155 and that the alternate dispute settlement procedure for automotive products would not benefit U.S. workers or the U.S. auto industry. 156 LAC also added that the provisions would not prevent Korea from waiving or weakening its existing domestic labor laws and that the provisions do not provide for adequate enforcement of the International Labor Organization’s (ILO) core labor standards, particularly employment discrimination. 157 LAC remarked that if goods from the Kaesong Industrial Complex (KIC), a free trade zone located in North Korea, enter the U.S. market, then failure to enforce internationally recognized labor rights in the KIC should be subject to the dispute settlement procedures in this chapter. LAC added that its members object to three changes in the wording of this chapter from most previous FTAs: (1) the phrase “or as the parties otherwise agree” in section 22.4 of this chapter that will allow parties to alter the scope of what is subject to the dispute-settlement provisions; (2) the FTA omitted the requirement in other FTAs that parties suspending benefits as part of a dispute settlement must first attempt to apply such suspensions to the same sector as was affected by the dispute; and (3) the FTA did not contain a requirement as to the qualification criteria for panelists in section 22.9 of this chapter. Finally, LAC stated 150 ITAC (2) on Automotive Equipment and Capital Goods, Advisory Committee Report, April 27, 2007, 13. 151 Ibid., 9; LAC for Trade Negotiations and Trade Policy, Report, April 27, 2007, 26; Meyer, testimony before the USITC, June 20, 2007, 220; and Congressman Levin, testimony before the USITC, June 20, 2007, hearing transcript, 161–162. 152 Meyer, testimony before the USITC, June 20, 2007, hearing transcript, 220–222; Congressman Levin, testimony before the USITC, June 20, 2007, hearing transcript, 161–162; ITAC (2) on Automotive Equipment and Capital Goods, Advisory Committee Report, April 27, 2007, 11; and LAC for Trade Negotiations and Trade Policy, Report, April 27, 2007, 20. 153 Biegun, testimony before the USITC, June 20, 2007, hearing transcript, 235. 154 LAC for Trade Negotiations and Trade Policy, Report, April 27, 2007, 26; and Meyer, hearing transcript, 220. 155 LAC for Trade Negotiations and Trade Policy, Report, April 27, 2007, 25. 156 Ibid., 20. 157 Ibid., 7. 6-40
that the procedural deadlines as outlined in the chapter could lead to delays and have an injurious effect on a complaining party. 158 In its report on the agreement, the Trade and Environment Policy Advisory Committee (TEPAC) stated that it approves of the transparency provisions relating to dispute-settlement proceedings as outlined in this chapter, but would prefer that the acceptance of submissions from the public in dispute-settlement proceedings be mandatory rather than permissive. 159 TEPAC added that its members approve of the panel selection procedures and believe the procedures would ensure that panelists dealing with environmental issues have the requisite expertise. TEPAC, however, expressed concern about the clarity and implication of the side letter to the FTA related to environmental dispute resolution that states that parties should first consider whether the party at issue maintains environmental laws “of substantial equivalent scope” as the potential dispute-settlement matter before initiating such a proceeding. TEPAC urged that this side letter be clarified before the FTA is approved. 160 In its report, the Intergovernmental Policy Advisory Committee (IGPAC) recommended the creation of a federal-state international trade commission that would provide an infrastructure to facilitate cooperation and understanding of trade issues across all levels of government and to address state and local interests in such issues, including disputesettlement proceedings. 161 IGPAC said that such a committee should be based on U.S. constitutional federalism, and cited the Canadian federal-provincial committee for trade consultations (C-Trade) as a potential model. IGPAC also said that the USTR and the U.S. Department of Justice should request that the federal government cover expenses that state governments incur in the course of defending state laws or regulations in the disputesettlement process associated with this FTA. 162 In its report, the Advisory Committee for Trade Policy and Negotiations (ACTPN) stated that the procedures in this chapter are fully transparent and supports the use of public hearings and acceptance of submissions of interested parties. 163 ACTPN added that it supports the provisions throughout the chapter to settle disputes through consultation. 164 In their respective reports, the Industry Trade Advisory Committee on Customs Matters and Trade Facilitation (ITAC 14) 165 and the Industry Trade Advisory Committee on Small and Minority Business (ITAC 11) also expressed support for the dispute-settlement procedures as outlined in this chapter. 166 158 Ibid., 20–21. 159 TEPAC, Advisory Committee Report, April 25, 2007, 10. 160 Ibid. 161 IGPAC, Advisory Committee Report, April 24, 2007, 12. 162 Ibid., 20. IGPAC notes that California, under NAFTA Chapter 11, will be the state most frequently involved in such proceedings. 163 ACTPN, Report, April 26, 2007, 5. 164 Ibid., 9. 165 ITAC (14) on Customs Matters and Trade Facilitation, Advisory Committee Report, April 18, 2007, 7. 166 ITAC (11) on Small and Minority Business, Advisory Committee Report, April 26, 2007, 8. 6-41
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U.S. International Trade Commission
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This report was prepared principall
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CONTENTS-Continued Chapter 3. Secto
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CONTENTS—Continued Chapter 5. Imp
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CONTENTS-Continued Chapter 7. Liter
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CONTENTS-Continued Tables—Continu
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Abbreviations and Acronyms 3G third
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Abbreviations and Acronyms—Contin
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Abbreviations and Acronyms—Contin
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vehicles) would likely be diverted
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Sector-specific Assessments The U.S
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total increased fish imports from K
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Korea would likely limit the impact
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Intellectual property rights (IPR):
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sector barriers. 5 These merchandis
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Table 1.1 U.S.-Korea FTA: Location
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Table 1.2 Korean tariff rates on im
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Table 1.4 U.S.-Korea FTA: Summary o
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observed GDP for model regions). Th
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Box 2.1 Interpreting the model resu
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Table 2.1 U.S.-Korea FTA: Simulated
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2-8 This page has been updated to r
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Figure 2.2 U.S-Korea FTA: Simulated
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As shown in figure 2.2, the largest
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2-14 This page has been updated to
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Economy-wide Impact of Implementing
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Grain (Wheat, Corn, and Other Feed
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Korea imported 3.8 million mt of wh
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U.S. oilseed product exports to Kor
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Table 3.2 U.S. oilseed product expo
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Table 3.3 Animal feed exports to Ko
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consumed domestically by the U.S. l
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ates. For corn starch, the United S
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quota rates have been effectively e
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Noncitrus Fruit 87 Views of Interes
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3-20 Table 3.9 U.S.-Korea trade and
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Korean grapes are much more costly
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Potato Products 122 Assessment The
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ate is 304 percent ad valorem. 141
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Other Vegetables 162 Assessment The
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U.S. exports of other fresh and pro
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tariff concessions that could accru
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Dairy Products 215 Similarly, the p
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TRQ for food whey, 223 based on cur
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potential changes in trade based so
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Figure Figure 3.1 Korea: Beef and v
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Views of Interested Parties The inc
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are subject to the same food safety
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enefit under the provisions of this
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Box 3.2 Potential price and quantit
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50 percent, while the vegetable jui
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and major supplier, and U.S. tariff
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textiles and apparel through 2005.
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U.S. Exports The impact of the FTA
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passage. NCTO indicated that, even
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In its report, the ITAC on Distribu
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of the U.S. footwear market, with C
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of these producers. 362 RPFMA noted
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prohibit improper inducements by ph
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Machinery, Electronics, and Transpo
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U.S. exports of auto parts would be
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imports from and exports to Korea.
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Passenger Vehicles 433 Assessment U
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Table 3.16 Korean passenger vehicle
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import activities have continued
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Box 3.4 Automotive-related FTA Prov
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access. The FTA affirms the parties
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gaining U.S. market share regardles
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keep the products out.” 492 Mr. B
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these vehicles to Korea. The commit
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Brown expressed concern about the r
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goods; and high-technology medical,
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device pricing, reimbursement, and
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CHAPTER 4 Impact of Market Access P
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elative to GDP than do China, Japan
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services as a substantial improveme
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Box 4.2 Financial services: Competi
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Summary of Provisions Chapter 13 of
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national treatment, full establishm
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Box 4.4 Competitive conditions in t
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and cross-connect links 70 are more
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Box 4.5 U.S. legal services trade w
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establish offices in Korea to provi
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Box 4.6 Competitive conditions in t
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equirements and foreign ownership r
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CHAPTER 5 Impact of Trade Facilitat
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publication and administration of t
Page 179 and 180: Views of Interested Parties In its
Page 181 and 182: Summary of Provisions This chapter
Page 183 and 184: use of TBTs to protect Korea’s au
Page 185 and 186: conformity assessment procedures el
Page 187 and 188: FTA Chapter 15-Electronic Commerce
Page 189: Views of Interested Parties The U.S
Page 192 and 193: quantities as to be a substantial c
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Page 196 and 197: Box 6.1 Foreign investment in Korea
Page 198 and 199: in the FTA. The awards made by any
Page 200 and 201: Table 6.1 U.S.-Korea FTA: Industry
Page 202 and 203: (ITAC 5) report cited as particular
Page 204 and 205: Section C of Chapter 11 and the lac
Page 206 and 207: practices, and violations of consum
Page 208 and 209: FTA Chapter 17—Government Procure
Page 210 and 211: Both the United States and Korea ar
Page 212 and 213: 8) 87 also expressed support for th
Page 214 and 215: Box 6.2 Recent conditions of IPR pr
Page 216 and 217: protection to life of the author pl
Page 218 and 219: Views of Interested Parties A numbe
Page 220 and 221: GPHA stated in testimony before the
Page 222 and 223: Box 6.3 Labor market conditions in
Page 224 and 225: FTA Chapter 20—Environment 131 As
Page 226 and 227: trade measures are the least disrup
Page 228 and 229: FTA Chapter 22-Institutional Provis
Page 233 and 234: CHAPTER 7 Literature Review and Sum
Page 235 and 236: 7-3 Table 7.1 Model, liberalization
Page 237 and 238: terms. Much of the increase in U.S.
Page 239 and 240: Liberalization generated small incr
Page 241 and 242: Sander Levin, Member of the U.S. Ho
Page 243 and 244: Regarding footwear and travel goods
Page 245 and 246: Korea’s establishment as a region
Page 247 and 248: The California Table Grape Commissi
Page 249 and 250: order activity, and facilitate expa
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Page 253 and 254: Information Technology Industry Cou
Page 255 and 256: With respect to tariff and nontarif
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Page 259 and 260: PhRMA identified what it views as t
Page 261 and 262: the TIA stated that it supports the
Page 263 and 264: access to the market. The Council a
Page 265 and 266: United States, Spain, Chile, Brazil
Page 267 and 268: Bibliography Advanced Medical Techn
Page 269 and 270: AT&T. “AT&T Reaction to Free Trad
Page 271 and 272: ______. “Korea-U.S. Free Trade Re
Page 273 and 274: ______. “Country Finance: South K
Page 275 and 276: Global Trade Information Services I
Page 277 and 278: International Labor Organization (I
Page 279 and 280: Jones, Laura E. Executive Director.
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Lee, Hyunok, and Daniel A. Sumner.
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Nam, In-Soo. “Helio's Losses To W
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Powers, Mark. Northwest Horticultur
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Smith, Brad. American Council of Li
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U.S.-Korea Business Council (USKBC)
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______. “Korea, Republic of Oilse
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U.S. International Trade Commission
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Ward, David. American Council on Ed
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APPENDIX A Request Letter from USTR
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APPENDIX B Federal Register Notices
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pwalker on PROD1PC71 with NOTICES 2
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APPENDIX C Hearing Participants
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ORGANIZATION AND WITNESS: PANEL 1 (
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APPENDIX D U.S.-Korea FTA: Chapter-
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fees and charges on trade in goods
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determines the tariff classificatio
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The transparency provisions would a
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necessary duties within 1 year of i
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technical regulation or conformity
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procedures), and practices of a par
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aviation, fisheries, or maritime ma
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of standards and criteria and on te
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of the FTA that impose unilateral o
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use of electronic authentication in
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parties’ rights and obligations u
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establishment of Uniform Domain-Nam
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government to take appropriate meas
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environmental laws. 102 In the U.S.
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not limited to, policies on commerc
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Economic indicators 2002 2006 Popul
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Table E.1 Leading U.S. exports to K
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APPENDIX F GTAP Model
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Updating the GTAP Database The curr
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Key Assumptions Agency. 4 The price
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Table F.2 U.S.-Korea FTA benchmark
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Measuring the Impacts of the FTA an
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General Effects of Trade Agreements
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APPENDIX H Tariff Equivalents in Ko
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Previous Literature The method for
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For the purposes of this report, a
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Table H.1 Tariff equivalents in Kor
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APPENDIX I Services Nonconforming M
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Table I.1 U.S.-Korea FTA: Korean se
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APPENDIX J Description of Possible
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are in effect import prices, and th
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APPENDIX K Overview of Agricultural
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Additionally, although current regu
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About This Report The United States
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