Hill has a 'beef' with S. Korea trade pact

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The Bush administration said yesterday "Congress will and should celebrate" its free-trade agreement with South Korea despite doubts by congressional trade leaders, particularly regarding beef and automobile issues.

U.S. lawmakers said after the deal was reached last weekend that they would not approve the deal unless South Korea lifts its ban on U.S. beef. They also raised concerns about barriers against rice and automobiles.

Deputy U.S. Trade Representative Karan Bhatia said U.S. negotiators made it clear to the South Korean government that the administration believes Congress will not pass the pact unless the country fully reopens its market to U.S. beef. South Korea banned U.S. beef in 2003 after mad cow disease was found in Canadian cattle.

U.S. officials say South Korea is likely to take steps to reopen its market after a meeting next month of the World Organization for Animal Health.

Mr. Bhatia highlighted the amount of support the agreement has received, and an administration handout included supportive quotes from a range of business organizations, including the U.S. Chamber of Commerce, the American Council of Life Insurers, the American International Automobile Dealers Association and the National Potato Council.

The agreement was criticized Monday by Senate Finance Committee Chairman Max Baucus, Montana Democrat; Sen. Charles E. Grassley of Iowa, the senior Republican on the finance panel; and House Ways and Means trade subcommittee Chairman Sander M. Levin, Michigan Democrat.

Mr. Levin criticized the pact for having given the South Koreans "what they wanted, immediate elimination of the U.S. tariff on most autos and on all auto parts, as well as eventual elimination of the tariff on trucks."

Two of the major U.S. automobile companies also expressed doubts about the pact.

Ford Motor Co. said it was "extremely disappointed" with the agreement.

"Unfortunately this agreement, as we understand it, will not open the Korean market to free trade in automobiles," Ford said.

"The Korean government missed its last, best chance to undo the protectionist policies that over the past two decades have kept the Korean auto market off limits to all manufacturers -- U.S., Japanese and European. This agreement should not be approved by the Congress in its current form," the company said.

DaimlerChrysler had similar misgivings, saying it had been working with the administration since "the beginning of the talks to reduce barriers to the Korean auto market, which is the most closed market in the industrialized world."

"While we have supported every free-trade agreement negotiated by the U.S. government, we will not support this agreement as we currently understand it," the company said.

Mr. Bhatia defended the auto provisions in the pact, saying "it is the strongest automobile package that exists in any free-trade agreement and has taken carefully into consideration views expressed by industry and also by members of Congress."

The deal includes elimination of South Korean tariffs and language relating to South Korea's tax structure and regulatory issues.

"With this agreement, U.S. auto manufacturers, I believe, can be assured of the elimination of tariff and non-tariff barriers in the Korean market," Mr. Bhatia said.

"Without this agreement, there is no such assurance."