McDermott feels confident US, Korea will complete trade deal

Despite a few kinks, Rep. Jim McDermott (D-Wash.) is confident the United States and Korea will complete their pending free trade agreement within the next several months.

In a telephone interview from Seoul on Thursday, McDermott told The Hill he's aware that members of Korea's opposition Democratic Party (DP) are opposed to the trade pact, arguing that any deal would hurt Korea and favor the U.S. auto industry.

Although McDermott, the top Democrat on the House Ways and Means Subcommittee on Trade, noted "tension" and "some division" between Korean lawmakers during talks this week, he wasn't concerned that it would affect the eventual completion of the U.S.-Korea trade deal.

McDermott, who is making his first trip to Korea in two years, said the two nations have been through a bumpy period since the trade deal was signed in 2007 and the U.S. failed to act. Neither country has ratified the agreement, and McDermott suggested that Korean officials would like to see the U.S. move forward before their National Assembly holds a final vote. 

They've made clear that they "put their nickel on the bar" and are eager for the United States to act. He said there is a feeling among some Korean lawmakers that they shouldn't agree to a trade agreement that was renegotiated more than three years after it was signed and that there's a "loss of face."

So the message for a while has been "let's get on with it," he said. 

McDermott joked that during a dinner in Seoul he noticed only Italian wine on the table. A Korean official said a bottle of wine that would cost $13 in Seattle would cost $68 in Seoul because of tariffs.

"When the FTA goes through you'll have Washington wine in Korea," McDermott said he was told. "That's one example of 1,000 things that would change with the agreement."

Congress and the Obama administration have been in technical talks on the deal for at least a month, and McDermott and Commerce Secretary Gary Locke, who also made the trip, are pushing for Congress to complete the deal quickly as Korea's trade agreement with the European Union nears completion. 

McDermott and Locke were joined in Korea by Reps. Charles Rangel (D-N.Y.), Joseph Crowley (D-N.Y.), Dave Reichert (R-Wash.) and Gary Peters (D-Mich.), four out of five of whom sit on the House Ways and Means Committee, during their busy three-day visit. 

"I'm absolutely confident that this U.S.-Korea free trade agreement is going to be good for companies and workers of both nations," Locke told the American Chamber of Commerce in Seoul this week. 

U.S. Trade Representative Ron Kirk has reiterated that the Korea agreement is ready to go — lawmakers and the Obama administration are working through the agreement's technical issues, with President Obama pushing for action this spring — and has said he expects it will have broad congressional support. 

Although Republicans are pushing for all three pending trade deals with Korea, Panama and Colombia to be completed in close succession, McDermott suggested moving Korea and "seeing what happens after that."

While the Korean agreement has broad support, some Democrats have expressed concern over the nation's beef restrictions, including Senate Finance Committee Chairman Max Baucus (D-Mont.) and Senate Budget Committee Chairman Kent Conrad (D-N.D.). While Korea agreed in December to provide broader access to U.S. automakers, which called for a delayed phase-out of auto tariffs, no accord was reached on the removal of restrictions on beef exports. 

McDermott said there didn't seem to be any give on current limits, with Korean officials saying they are handling the maximum amount of imported U.S. beef along with dealing with underlying concerns about mad cow disease. Korea gets the majority of its beef from Australia, he said. 

Meanwhile, the United States is racing against the clock to get a deal done within the same timeframe as Korea and the European Union, which is expected to take effect in July and eliminate nearly all duties on trade in manufactured and agricultural goods between the EU and Korea within five years.

An issue possibly slowing passage of the U.S. and EU agreements stems from election results this week. The DP gained a couple of seats in what are otherwise the majority Grand National Party (GNP) strongholds, signaling discontent within the nation's middle class. 

On Thursday, the Korean parliament's foreign affairs and trade committee — McDermott was meeting with those lawmakers and other members of the National Assembly on his last night in Korea — approved a trade agreement with the EU after the parties reached a deal on tax cuts for small livestock farms.

The deal still needs approval by the full house, which postponed a scheduled vote on Friday, as opposition legislators have said they won't approve it until there has been a full study of the effects on the economy. A final vote could be postponed until June, according to news reports out of Seoul. 

Meanwhile, Seoul's Cabinet on Thursday agreed to revoke a bill ratifying the U.S. pact after multiple translation errors were found in the Korean text. A new bill will be submitted to parliament next month.

The bill ratifying the EU deal also was delayed twice due to errors, and translation problems have plagued the passage of both deals.

The International Trade Commission (ITC) has estimated that the tariff cuts — the agreement eliminates tariffs on more than 95 percent of U.S. industrial and consumer goods within five years — will increase exports to Korea by $11 billion.