[Congressional Record (Bound Edition), Volume 156 (2010), Part 13]
[Senate]
[Pages 18276-18277]
[From the U.S. Government Publishing Office, www.gpo.gov]




                UNITED STATES-KOREA FREE TRADE AGREEMENT

  Mr. LEVIN. Mr. President, as our economy struggles to recover from 
the worst recession since the Great Depression, we must look at all 
ways to create jobs here at home. One obvious way to create jobs is to 
sell more products to overseas markets. That's why President Obama has 
announced the goal of doubling U.S. exports by the year 2015. That is 
an admirable goal and one that I support.
  To achieve that goal we have to examine our trade policies and change 
them when they are not working. That is surely what we need to do when 
it comes to the so-called U.S.-Korea Free Trade Agreement and 
automotive trade.
  This agreement, still being negotiated, would perpetuate an unlevel 
playing field that unfairly disadvantages U.S. automotive exports. One 
of the reasons the agreement has not been brought before the U.S. 
Congress for approval is because the agreement is skewed in favor of 
Korean automakers.

[[Page 18277]]

  The Bush administration made a major error in how it approached the 
growing field of electric vehicles during treaty negotiations. The 
agreement would allow for a 10 year phase-out of the 8 percent Korean 
tariff on hybrid electric passenger vehicles and the 2.5 percent U.S. 
tariff. This is not a fair deal for U.S. electric car exports. It's bad 
enough that the current Korean electric car tariff is more than three 
times the U.S. tariff. This agreement would lock in place for 10 years 
Korea's electric car tariff advantage as it is phased out. Why in the 
world would we agree to that?
  It is as if you beat me up eight times a day and I beat you up two 
times a day and you expect me to be happy when you reduce that beating 
to seven times per day--that is still not much of a deal for me.
  It is a stubborn thing this image some people have of free trade. It 
is like a blind faith belief that any trade agreement is automatically 
good for the United States. This seems to hold true no matter how many 
American jobs may have been lost as a result of unfair trading 
practices by our trading partners and no matter how bad a deal a 
specific free trade agreement might be for certain sectors in the 
United States. The response always seems to be the same for those that 
criticize an unbalanced free trade agreement: they call the critics 
protectionists.
  The protectionism enmeshed in the U.S.-Korea trade relationship is 
protectionism by Korea. Until 1989 Korea did not even allow imported 
autos into its market. Once it did officially allow imported vehicles 
into its market, Korea found other, less visible ways of keeping them 
out, including maintaining tariff and nontariff barriers, such as 
discriminatory taxes based on engine size, unique standards, inadequate 
regulatory transparency, and inadequate ability of stakeholders to 
provide input at an early stage into the development of regulations and 
standards.
  When it comes to automotive trade with Korea, the numbers tell the 
story. Korea has free unfettered access to the U.S. market and we have 
extremely limited access into Korea's market.
  Last year Korea shipped 476,833 autos to the United States. And while 
Korea relies on exports to support its domestic auto makers, Korea 
remains one of the most closed auto markets in the world. In a market 
of almost 1.5 million annual vehicle sales, the U.S. exported just 
5,878 autos to Korea last year. And it's not just American autos that 
are being kept out. Vehicles made in Korea account for 94 percent of 
the Korean market--only 6 percent of vehicles sold in Korea are 
imports. That is lower than every other developed country except Japan. 
In the U.S., over 41 percent of our auto market is made up of imports. 
In Germany that number is 55 percent, in Mexico it is 57 percent, and 
in Spain, Canada and Italy it is over 70 percent or higher.
  Korea's protected automotive market provides a huge source of profit 
and jobs for Korea and, in contrast, it is a huge source of trade 
deficits and job loss for the United States. About 74 percent of the 
$10.6 billion U.S. trade deficit with South Korea is in automotive 
trade.
  So to those who say we are protectionist when we complain about this, 
I respond that we are not the protectionists and we have not protected 
our automotive market. The nearly 500,000 Korean-made vehicles that 
come into the U.S. market each year validate this point, as does our 
2.5 percent auto tariff compared to Koreas 8 percent auto tariff and 
numerous non-tariff barriers that keep our vehicles out of Korea.
  Despite efforts by the U.S. Government for over a decade to open the 
Korean auto market, Korea has successfully kept its market closed. 
Auto-specific agreements negotiated in 1995 and 1998 failed to make any 
progress in opening Korea's automotive market. Although the previous 
agreements were intended to sweep away some of the most overt non-
tariff barriers, Korea quickly replaced them. For instance, the year 
after the 1998 auto-specific agreement was signed committing Korea to, 
``Not take any new measures that directly or indirectly adversely 
affect market access for foreign passenger vehicles'' Korea introduced 
three new and unique auto safety standards: front tow hook, headlamp, 
and remote keyless entry. In the 3 years after that, Korea introduced 
seven more auto safety and emissions regulations. And in the 4 years 
after that, Korea introduced another seven, and the list continues. Our 
protests were for naught.
  Any trade agreement with South Korea should level the playing field 
for U.S. auto exports. Unfortunately, the pending agreement, reached 
more than 3 years ago but now being renegotiated, leaves South Korea 
with the effective ability to use rules and regulations to continue 
limiting automotive imports into the Korean marketplace. Korea has used 
such rules and regulations before to discriminate against imported 
vehicles and they will be used again unless we have a strong mechanism 
to remove them. This agreement does not include such a mechanism to 
deal with any new nontariff barriers, such as auto safety standards or 
emissions regulations that Korea could introduce once the current draft 
agreement is entered into and approved by the Congress.
  The agreement is strongly opposed by Ford and Chrysler because the 
agreement does not ensure that South Korea will not take measures to 
impede access of imported U.S. made cars. GM is neutral on the 
agreement because it gained access to the Korea market by buying 
Daewoo, not by exporting cars to Korea from the United States.
  Ensuring fair access to the Korean market would have an important 
impact on our auto industry's drive to regain its competitive strength 
and health. We need to fight for American jobs, not let them go 
overseas as a result of poorly negotiated trade agreements. We need to 
find a way to gain meaningful access to Korea's auto market and so far 
this trade agreement has not achieved that goal.

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