[Congressional Record (Bound Edition), Volume 152 (2006), Part 1]
[Senate]
[Pages 747-749]
[From the U.S. Government Publishing Office, www.gpo.gov]




                FREE TRADE AGREEMENT--REPUBLIC OF KOREA

  Mr. STEVENS. Mr. President, I ask unanimous consent that the attached 
letter from the United States Trade Representative be entered into the 
Record. It serves as notification to Congress that the President 
intends to initiate negotiations for a free trade agreement, FTA, with 
the Republic of Korea.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         Executive Office of the President, The United States 
           Trade Representative, Washington, DC, February 2, 2006.
     Hon. Ted Stevens,
     President pro tempore, U.S. Senate, Washington, DC.
       Dear Senator Stevens: In accordance with section 2104(a)(1) 
     of the Trade Act of 2002 (the Trade Act), and pursuant to 
     authority delegated to me by the President, I am pleased to 
     notify the Congress that the President intends to initiate 
     negotiations for a free trade agreement (FTA) with the 
     Republic of Korea. We expect these negotiations to commence 
     in May 2006. We will be consulting closely with the Congress 
     regarding these negotiations, as required by the Trade Act.
       The Administration is committed to concluding trade 
     agreements that benefit our farmers, workers, businesses, and 
     families by opening markets around the world. With the 
     continued help of Congress, we will continue to advance 
     America's trade interests.
       An FTA with Korea will help foster economic growth and 
     create higher paying jobs in the United States by reducing 
     and eliminating barriers to trade and investment between 
     Korea and the United States. An FTA will enable American 
     companies to increase their exports of goods and services to 
     Korea. The FTA will require Korea to eliminate its tariffs on 
     U.S. industrial and agricultural goods, remove any 
     unjustified sanitary and phytosanitary (SPS) measures, 
     improve the transparency of its regulatory and licensing 
     procedures, and lower its barriers to U.S. service providers.
       The United States has much to gain through an FTA with 
     Korea. Korea already is our seventh largest trading partner 
     with $72.6 billion in total bilateral trade during 2004. An 
     FTA promises to increase trade still further across a wide 
     range of goods and services and thereby promote economic 
     growth and the creation of better paying jobs in both 
     countries. An FTA will also level the playing field for U.S. 
     exports in Korea by providing U.S. products treatment 
     comparable to that which Korea has offered its other FTA 
     partners, such as Chile, Singapore, and the European Free 
     Trade Association countries (Iceland, Norway, Switzerland, 
     and Liechtenstein).
       An FTA with Korea will provide benefits for U.S. 
     agricultural producers. In 2005, based on eleven month 
     annualized data, Korea was the sixth largest export market 
     for U.S. farm and ranch products. Under an FTA, Korea will 
     eliminate duties on U.S. agricultural goods and reduce other 
     barriers in Korea's agricultural sector, thus creating new 
     opportunities for U.S. farmers in this major market. U.S. 
     negotiators will work hard to ensure that the FTA facilitates 
     further market access for U.S. food and other agricultural 
     exports to Korea and addresses the full range of trade 
     barriers that U.S. agriculture exports currently face in 
     Korea, including unjustified SPS measures. We will consult 
     closely with Congress and the U.S. agriculture community in 
     developing our positions on agricultural issues during the 
     negotiations.
       The FTA will also promote exports of U.S. industrial goods 
     by eliminating Korea's tariffs on U.S. products and reducing 
     its non-tariff barriers. U.S. industry groups have 
     consistently cited Korea as a potential FTA partner because 
     of the significant opportunities an FTA will provide for new 
     U.S. industrial goods exports. FTA negotiations will also 
     provide an opportunity to reduce or eliminate restrictions 
     that make it difficult for U.S. service providers to operate 
     in the Korean market.
       In recent years, U.S. industry has repeatedly pointed out 
     deficiencies in Korea's efforts to protect intellectual 
     property. The Administration has held extensive, detailed 
     discussions on this subject with Korea since 2001, and Korea 
     has made progress on important issues, including improved 
     protection

[[Page 748]]

     for sound recordings transmitted over the Internet and better 
     enforcement against software and textbook piracy. FTA 
     negotiations will provide a unique opportunity to improve 
     further the protection that Korea affords to intellectual 
     property, including strengthened measures in Korea against 
     the illegal online distribution and transmission of 
     copyrighted works.
       We also recognize the concerns raised by U.S. industry 
     about the close interaction between the Korean government and 
     business in some sectors of the economy and the insufficient 
     transparency in Korea's regulatory processes. In order to 
     address these concerns, we will seek to ensure that the FTA 
     provides for regulatory transparency in trade and investment 
     matters, including a public comment period, the publication 
     of general administrative actions, and other appropriate 
     provisions.
       An FTA with Korea will also promote bilateral investment. 
     U.S. companies are already the largest source of foreign 
     investment in Korea, while Korea is a growing source of 
     investment in the United States. Additional bilateral 
     investment holds the potential of adding to the many jobs 
     that current high levels of bilateral investment support.
       An FTA will also help strengthen Korea's cooperation with 
     the United States in multilateral and regional trade fora. 
     Korea is already a close partner in the Asia-Pacific Economic 
     Cooperation (APEC) and in the Doha Round of negotiations in 
     the World Trade Organization (WTO). As host country for the 
     APEC Leaders Meeting in November 2005, Korea played a 
     leadership role in securing a call by all 21 APEC Leaders for 
     an ambitious conclusion to the WTO Doha Development Agenda. 
     It similarly played a constructive role in the recent Hong 
     Kong Ministerial meeting. Concluding an FTA will help ensure 
     that there continues to be a commonality of interest and 
     close cooperation between the United States and Korea in all 
     international trade fora.
       In addition to complementing our cooperative efforts with 
     Korea on global and regional trade issues, an FTA will 
     further enhance the strong United States-Korea regional 
     partnership, which is a force for stability and development 
     in Asia. An FTA will reinforce the shared interests of the 
     United States and Korea and promote common values, 
     facilitating our efforts to work together on a wide range of 
     issues. Korea is a key ally in the region on military and 
     security matters. We are partners in the global war on 
     terrorism, and the extensive ties between the U.S. and Korean 
     armed forces bolster U.S. strategic interests in the region.
       While we see substantial benefits in pursuing an FTA with 
     Korea, we are also giving careful consideration to concerns 
     that some members of Congress have raised regarding Korea's 
     trade policies. We will continue to consult closely with 
     Congress as we consider how to address these issues in the 
     context of FTA negotiations.
       Initial consultations with the Congressional Oversight 
     Group (COG) on September 8, 2005 and with other Members of 
     Congress regarding potential FTA negotiations with Korea have 
     been positive, and our decision to move ahead with 
     negotiations with Korea was strongly influenced by the 
     bipartisan expressions of interest we have received from 
     members of Congress and U.S. industry. The Administration 
     will continue to consult closely with the Congress, including 
     the COG, throughout the negotiation process on the full range 
     of issues.
       Our specific objectives for negotiations with Korea are as 
     follows:
     Trade in Goods
       Seek to eliminate tariffs and other duties and charges on 
     trade between Korea and the United States on the broadest 
     possible basis, subject to reasonable adjustment periods for 
     import-sensitive products.
       Seek to eliminate non-tariff barriers in Korea to U.S. 
     exports, including permit and licensing barriers on 
     agricultural and other products, restrictive administration 
     of tariff-rate quotas, unjustified trade restrictions that 
     affect new U.S. technologies, and other trade restrictive 
     measures that U.S. exporters identify.
       Seek to eliminate government practices that adversely 
     affect U.S. exports of perishable or cyclical agricultural 
     products, while providing for improved U.S. import relief 
     mechanisms as appropriate.
       Pursue a mechanism with Korea that will support achieving 
     the U.S. objective in the WTO negotiations of eliminating all 
     export subsidies on agricultural products, while maintaining 
     the right to provide bona fide food aid and preserving U.S. 
     agricultural market development and export credit programs.
       Pursue fully reciprocal access to the Korean market for 
     U.S. textile and apparel products.
     Customs Matters, Rules of Origin, and Enforcement Cooperation
       Seek specific and trade facilitative customs commitments to 
     ensure that Korea's customs operations are conducted with 
     transparency, efficiency, and predictability, and that 
     Korea's customs laws, regulations, decisions, and rulings are 
     applied in a manner that facilitates the efficient and timely 
     release of goods, and prevents unwarranted procedural 
     obstacles to international trade.
       Seek rules of origin, procedures for applying these rules, 
     and provisions to address circumvention matters that will 
     ensure that preferential duty rates under an FTA with Korea 
     apply only to goods eligible to receive such treatment, 
     without creating unnecessary obstacles to trade.
       Seek terms for cooperative efforts with Korea regarding 
     enforcement of customs and related issues, including in the 
     area of trade in textiles and apparel.
     Sanitary and Phytosanitary (SPS) Measures
       Seek to have Korea reaffirm its WTO commitments on SPS 
     measures and eliminate any unjustified SPS restrictions.
       Seek to strengthen cooperation between U.S. and Korean SPS 
     authorities.
       Seek to strengthen collaboration with Korea in implementing 
     the WTO SPS Agreement and to enhance cooperation with Korea 
     in relevant international bodies on developing international 
     SPS standards, guidelines, and recommendations.
     Technical Barriers to Trade (TBT)
       Seek to have Korea reaffirm its WTO TBT commitments and 
     eliminate any unjustified TBT measures.
       Seek to strengthen collaboration with Korea in implementing 
     the WTO TBT Agreement and create a procedure for exchanging 
     information with Korea on TBT-related issues.
     Intellectual Property Rights
       Seek to establish standards to be applied in Korea that 
     build on the foundations established in the WTO Agreement on 
     Trade-Related Aspects of Intellectual Property Rights and 
     other international intellectual property agreements, such as 
     the World Intellectual Property Organization (WIPO) Copyright 
     Treaty, the WIPO Performances and Phonograms Treaty, and the 
     Patent Cooperation Treaty.
       In areas such as patent protection and protection of 
     undisclosed information, seek to have Korea apply levels of 
     protection and practices more in line with U.S. law and 
     practices, including appropriate flexibility.
       Seek to strengthen Korea's laws and procedures to enforce 
     intellectual property rights, such as by ensuring that Korean 
     authorities seize suspected pirated and counterfeit goods, 
     equipment used to make such goods or to transmit pirated 
     goods, and documentary evidence.
       Seek to strengthen measures in Korea that provide for 
     compensation of right holders for infringements of 
     intellectual property rights and to provide for criminal 
     penalties under Korean law that are sufficient to have a 
     deterrent effect on piracy and counterfeiting.
     Trade in Services
       Pursue disciplines to address discriminatory and other 
     barriers to trade in Korea's services market, and pursue a 
     comprehensive approach to market access, including any 
     necessary improvements in access to the telecommunications, 
     financial services, professional services, or other sectors.
       Seek improved transparency and predictability of Korean 
     regulatory procedures, specialized disciplines for financial 
     services, and additional disciplines for telecommunications 
     and other service sectors, as necessary.
     Investment
       Seek to establish rules that reduce or eliminate artificial 
     or trade-distorting barriers to U.S. investment in Korea, 
     while ensuring that Korean investors in the United States are 
     not accorded greater substantive rights with respect to 
     investment protections than U.S. investors in the United 
     States, and to secure for U.S. investors in Korea important 
     rights comparable to those that would be available under U.S. 
     legal principles and practice.
       Seek to ensure that U.S. investors receive treatment as 
     favorable as that accorded to domestic or other foreign 
     investors in Korea and to address unjustified barriers to the 
     establishment and operation of U.S. investments in Korea.
       Provide procedures to resolve disputes between U.S. 
     investors and the Korean government that are in keeping with 
     the Trade Promotion Authority goals of being expeditious, 
     fair, and transparent.
     Electronic Commerce
       Seek to have Korea affirm that it will allow products and 
     services to be delivered electronically and will not 
     unjustifiably discriminate among those products and services.
       Seek to affirm that Korea does not apply customs duties to 
     digital products that are delivered electronically.
       Seek to ensure that Korea determines the dutiable value of 
     digital products contained on carrier media based on the 
     value of the media, not their content.
     Government Procurement
       Seek to expand on Korea's commitments in the WTO Government 
     Procurement Agreement (GPA), thus providing greater 
     opportunities for U.S. firms to secure construction and 
     supply contracts with the Korean government, particularly by 
     allowing U.S. suppliers to compete for smaller contracts that 
     are not currently open to U.S. bidders or goods.

[[Page 749]]


     Transparency/Anti-Corruption/Regulatory Reform
       Seek to make Korea's administration of its trade and 
     investment regime more transparent, and pursue rules that 
     will permit timely and meaningful public comment before Korea 
     adopts trade- and investment-related measures.
       Seek to eliminate Korean government regulation or other 
     measures that discriminate against or deny full market access 
     for U.S. exporters or investors.
       Seek to ensure that Korea applies high standards 
     prohibiting corrupt practices affecting international trade 
     and investment and enforces such prohibitions.
     Competition
       Address anticompetitive business conduct, designated 
     monopolies, state enterprises, and other competition-related 
     issues, as appropriate.
       Seek provisions that foster cooperation on competition law 
     and policy and that provide for consultations on specific 
     competition issues that may arise.
     Trade Remedies
       Provide a safeguard mechanism during the transition period 
     to allow a temporary revocation of tariff preferences if 
     increased imports from Korea are a substantial cause of 
     serious injury or threat of serious injury to the domestic 
     industry.
       Make no changes to U.S. antidumping and countervailing duty 
     laws.
     Environment
       Seek to promote trade and environment policies that are 
     mutually supportive.
       Seek an appropriate commitment by Korea to effectively 
     enforce its environmental laws.
       Establish that Korea will strive to ensure that it will 
     not, as an encouragement for trade or investment, weaken or 
     reduce the protections provided for in its environmental 
     laws.
       Seek to develop ways to work with Korea, including through 
     consultative mechanisms, to promote sustainable development 
     and address environmental issues of mutual interest.
     Labor
       Seek an appropriate commitment by Korea to effectively 
     enforce its labor laws.
       Establish that Korea will strive to ensure that it will 
     not, as an encouragement for trade or investment, weaken or 
     reduce the protections provided for in its labor laws.
       Based upon review and analysis of Korea's labor law and 
     practices, establish procedures for consultations and 
     cooperative activities with Korea to strengthen its capacity 
     to promote respect for core labor standards, including 
     compliance with ILO Convention 182 on the worst forms of 
     child labor.
     State-to-State Dispute Settlement
       Encourage the early identification and settlement of 
     disputes through consultation.
       Seek to establish fair, transparent, timely, and effective 
     procedures to settle disputes arising under the agreement.
       In addition, the FTA with Korea will take into account 
     other legitimate U.S. objectives including, but not limited 
     to, the protection of health, safety, environment, essential 
     security, and consumer interests.
       We are committed to concluding these negotiations with 
     timely and substantive results for U.S. workers, consumers, 
     businesses, and farmers, and will pursue these specific 
     objectives, keeping in mind the overall and principal U.S. 
     negotiating objectives and priorities that the Congress has 
     identified. We look forward to continuing to work with the 
     Congress as negotiations with Korea begin, and we commit to 
     work with you as we bring them to a successful conclusion.
           Sincerely,
     Rob Portman.

                          ____________________