State eager for approval of free trade with S. Korea

WASHINGTON — Four years after President George W. Bush reached a free-trade agreement with South Korea, Congress may at long last vote on it this summer — paving the way for duty-free Starbucks roasted coffee in Seoul and lower sticker prices on Hyundai sedans in the United States.

The pact, the largest since the North American Free Trade Agreement of 1994, has united odd ideological corners of Congress in support while splintering organized labor's long-standing opposition to liberalizing trade.

This week, Commerce Secretary Gary Locke; Rep. Jim McDermott, D-Seattle; Rep. Dave Reichert, R-Auburn; and two other House members are making a three-day swing through the Korean peninsula to promote ratification of the agreement by both nations' lawmakers.

If approved, the deal would gradually do away with nearly all trade barriers between the United States and its seventh-largest trading partner.

Perhaps most significantly for American industry, South Korea would immediately eliminate an 8 percent tariff on U.S. passenger cars and a 10 percent tariff on trucks — cracking open a market where virtually every vehicle on the road is a domestic model.

The prospect of boosting exports from Detroit prompted the United Automobile Workers to break from other unions to back the pact. But many labor groups, including the International Association of Machinists (IAM), remain strongly opposed.

South Korea already exports $500 million worth of aerospace products to the United States each year. The IAM, which represents assembly-line workers at Boeing, fears that removing tariffs on aircraft parts would cost well-paying union jobs while doing nothing to shrink the trade deficit with South Korea.

The agreement also would phase out a 40 percent Korean tariff on U.S. beef, the exports of which plummeted after the mad-cow disease outbreak in late 2003. Washington state sold more than $42 million of beef products in Korea just before the U.S.' first case of bovine spongiform encephalopathy was detected near Yakima.

Even though South Korea partially lifted the ban in 2008, the state's beef exports have barely begun to recover, totaling just $3.2 million last year.

U.S. International Trade Commission estimates eliminating South Korea's tariffs and quotas on American goods would expand the U.S. economy by $10 billion to $12 billion a year.

Speaking to reporters along with McDermott and Reichert by phone from Seoul on Thursday, Locke, a former Washington state governor, said American trade negotiators late last year extracted better terms than what South Korea initially agreed to in 2007. The net result, he said, should be "increased jobs in America."

The Korea agreement is one of three that have been inching their way to Capitol Hill for several years. Free-trade pacts with Panama and Colombia also have been hung up by opposition from some Democrats, a smaller number of Republicans, unions and human-rights groups, among others.

Trade experts believe Republicans on Capitol Hill could peel away enough Democratic votes to pass all three agreements. President Obama views the deal with South Korea as particularly crucial to meeting his goal of doubling exports by 2014.

Washington's congressional delegation historically has supported free trade. McDermott and Reichert serve together on the House Ways and Means Committee, which oversees trade issues.

Washington is especially eager to expand into South Korea's well-protected agricultural markets. Lower tariffs will mean more exports of Washington's wheat, wine, frozen French fries, cherries and other crops.

But the agreement will leave intact the ban on apples, Washington's biggest cash crop. South Korea prohibits imported U.S. apples or pears, citing concerns for potential pests or disease.

Rep. Doc Hastings, R-Pasco, said trade agreements are imperfect and won't include everything sought by each side. Yet with one of every three jobs in Washington tied to trade, Hastings said, further delays in approving the trade deals would shortchange the state's economy.

McDermott urged swift action on the South Korea deal to keep American companies competitive and to fend off other trade partners. South Korea is pursuing trade agreements with Australia, Japan, Canada and Mexico.

During the scare over mad-cow disease, for instance, Australia supplanted the United States as the top beef exporter to South Korea. Come July 1, McDermott noted, South Korea will inaugurate a new free-trade relationship with the European Union.

Kyung Song: 202-662-7455 or ksong@seattletimes.com