BUSAN, South Korea — From here, the world’s fifth-largest seaport sends Kia and Samsung products to the United States on Hyundai ships, while boatloads of American beef and iPhones come the other way.
Most Busan residents are banking on even greater commerce if the Korea-U.S. free trade agreement becomes law.
The trade pact would “be very good for us,” said Kim Jong-mok, spokesman for the Busan-Jinhae Free Economic Zone - a government project that attracts businesses with generous tax benefits. The agreement would boost exports, and “once our export business increases, then more investors will want to come,” he said.
The deal would remove 95 percent of each nation’s tariffs on goods within five years of approval and could increase bilateral trade by up to $20 billion.
However, the trade agreement has been lingering in Washington and Seoul since former President George W. Bush and former South Korean President Roh Moo-hyun signed the deal in 2007.
Opposition from labor unions and congressional Democrats and similar trade foes in South Korea forced President Obama and South Korean President Lee Myung-bak to renegotiate the agreement last year. Both legislatures are now considering the new trade deal.
Most public opinion polls show a majority of South Koreans support the agreement, however Korean farmers remain strongly opposed. The Korea Rural Economic Institute predicts that U.S. farm exports could double to nearly $6 billion and cost up to 130,000 jobs.
While Mr. Lee and lawmakers from his conservative Grand National Party strongly support the agreement, it still faces determined opposition in the National Assembly from the opposition Democratic Party, despite the fact that Mr. Roo, a Democratic Party president, initiated the deal.
Senior Democratic lawmaker Park Joo-sun recently told visiting reporters, on a trip sponsored by the U.S.-based East-West Center, that “our party agrees to the concept of the Korea-U.S. free-trade overall, but there are some toxic clauses that are detrimental to our national interest.”
Mr. Park complained about the five-year grace period the agreement gives the United States to remove tariffs on Korean automobiles. That was a key Korean concession last year in trade talks on renegotiating the original pact, which offered only a three-year grace period.
Mr. Park also complained that the free trade agreement failed to cover goods from the Kaesong Industrial Complex, an area six miles above the demilitarized zone where dozens of South Korean firms employ thousands of North Korean workers.
“In our national constitution, we regard North Korea as part of our territory and the North Korean people as our own people, and also, the goods produced at Kaesong are made with South Korea’s technology, funding, and materials,” Mr. Park said
Mr. Park’s party boycotted last month’s vote on a free-trade pact with the European Union, which is due to take effect in July. The EU deal will put U.S. firms at a competitive disadvantage, analysts say. Last month, Mr. Lee also met with Japanese and Chinese premiers to discuss a potential trilateral free trade agreement.
Chun Young-woo, Mr. Lee’s senior secretary for security and foreign affairs, predicted that the trade pact with the United States will be “at the top of the agenda” in the coming legislative term, which begins this month, but suggested that Congress act before the Korean assembly.
“We reserve the first movers’ right to the U.S. Congress,” he said with a smile. “Once the [trade pact] is ratified in the U.S. Congress, I think it will create the right momentum that will help us move forward on our approval process in the National Assembly.”