Seoul-Washington FTA benefits U.S. trade: Overby
SEOUL-- The free trade agreement (FTA) between South Korea and the United States has effectively benefited both countries since it went into effect in 2012, the senior vice president for Asia at the U.S. Chamber of Commerce said Wednesday.
"U.S. businesses believe the Korea-USA (KORUS) FTA is working well," Tami Overby said during an interview with Yonhap News Agency. "The U.S. only has three trade agreements in Asia, and recently withdrew from the Trans-Pacific Partnership (TPP), which makes the KORUS FTA even more important."
Her remark came as U.S. President Donald Trump has been calling for a renegotiation of the Seoul-Washington deal, claiming that the agreement only benefits South Korean companies.
Based on his support over protectionism, Trump ditched the TPP, and also plans to review other free trade deals.
"What the Korea-USA FTA provides to American companies in Asia is a launching pad," Overby said, highlighting that South Korea provides a favorable business environment.
Overby, who also serves as the president of the Washington-based U.S.-Korea Business Council, said although the agreement cannot be considered perfect, the KORUS FTA is still doing its job, adding the deal has made South Korea emerge as a favorable investment destination for American firms.
"When I first came to Korea in the late 1980s, South Korea was viewed as a very difficult place to do business for American companies. And the KORUS FTA has really smoothed it out," she claimed.
Through the agreement, Overby said South Korea became a predictable partner.
"On the regulatory side, we have seen Korea's regulation become more clear, transparent, and predictable," she said. "The agreement created mechanisms that allow us to handle disputes."
"American companies that bring their best intellectual property rights to Korea can be confident that they will be protected," Overby said. "In very large markets in Asia, that's a real concern. But in Korea, it's not."
Concerning Trump's claim that the FTA is responsible for Washington's trade deficit with Seoul, Overby said the agreement cannot be blamed, claiming the losses would have been "significantly higher" without the deal.
"Part of the reason we have a deficit is that the Korean economy has slowed down and there's a global recession," Overby pointed out.
The trade expert also argued that figures surrounding the deficit do not necessarily fully reflect trade between the two countries.
"It doesn't take into account services, a very important part of the U.S. economy," Overby said, claiming the deficit also did not include South Korean firms' direct investment made in the U.S., which creates many jobs, nor expenditures by students and tourists.
Overby, meanwhile, said the U.S. Chamber of Commerce plans to launch a program dubbed "KORUS Works" in the near future to promote the benefits of the Seoul-Washington FTA, taking a cue from the KORUS Coalition program which played a key role in ratifying the agreement.
In line with her support of the KORUS FTA, Overby said she cannot agree with the American Chamber of Commerce in Korea's (AMCHAM) proposal to create a US$10 billion "Buy American Fund" meant to purchase U.S.-made goods.
AMCHAM said in June if South Korea creates the fund, the country can make a favorable impression on Trump, who believes the FTA only left Washington with massive trade losses.
"We do not believe in managed trade. Our focus is to get a regulatory environment as transparent and up to the highest standard possible," she said.
Overby also described South Korea's New Trade Minister Kim Hyun-chong as "one of the smartest trade negotiators alive," expressing hope for him to play a key role in the latest dispute over the KORUS FTA.
"I think he is one of the reasons Korea is one of the leading countries in the world in free trade agreements," Overby said.
The U.S. Chamber of Commerce is a major business lobbying group that represents some 3 million companies of different sizes.
Source: Yonhap News Agency