Editor's Note: AWB President Don Brunell is in Washington, DC, for meetings with the National Association of Manufacturers (NAM). This blog posting was filed from our nation's capital.
While Korea's lifting of the beef embargo was a major step toward resolving differences between the United States and South Korea over a free trade agreement, resolving the differences between the two nations over auto imports and exports is a much thornier problem.
South Korea was the seventh largest market for U.S. exports in 2007 with $34.7 billion worth of goods sold. However, the United States bought more than it sold and had a $12.8 billion trade debt with that Asian country.
The top five leading U.S. exports to Korea, according to the U.S. Census Bureau included: semiconductors, industrial machinery, organic chemicals, civilian aircraft and lab instruments for measuring, testing and controls.
The top five leading exports from South Korea to the U.S. included cars, household goods, petroleum products, computer parts and accessories and other parts and accessories.
Herein lies the problem that could tube the deal. Last year, South Korea exported more than 700,000 cars to the United States while U.S. automakers only sent 5,000 the other way. While the U.S. International Trade Commission estimates that full implementation of the agreement would increase U.S. GDP by as much as $11.9 billion; for Midwestern members of Congress where the auto industry is taking a battering, they want the South Koreans to reduce the higher taxes they assess on cars with large engines.
For Microsoft, Costco, Boeing, Starbucks, Washington beef producers and food processors, the U.S.-Korea FTA is a winner. That is why the Association of Washington Business is urging Gov. Gregoire and our Congressional delegation to support it.
Whether it makes it through the halls of Congress this year is an open question.
Don C. Brunell, President (DonB@AWB.ORG)
