US to Renew Trade Barriers with South Korea

The sweet scent of success in Asia has pushed the US government into informal talks with its South Korean counterpart over a possible renewal of trade barriers in the auto sector. Called the Free Trade Agreement (FTA), the document was initiated by the former Bush administration in 2007 and is now being reconsidered by Obama's, prior to its ratification in Congress.

The US want Korea to open its doors more to US car imports. According to provisions of the old document, each American carmaker is allowed to sell 6,500 vehicles (built by US standards) per year in South Korea. The US believes this is not enough.

"For a long time, the Korean playing field was far from level. And we are still dealing with the legacy of Korea's long-closed market, especially with respect to autos. Our market is open to Korean autos. All we are asking for is for our own auto companies to be able compete on a level playing field in the Korean market," Ron Kirk, US Trade Representative was quoted as saying by just-auto.com at the US-Korea Business Council.

According to Tae-Nyen Kim, director of the international cooperation team at Korea Automobile Manufacturers Association (KAMA), the US is yet to make a clear proposal on how the new deal should look like and its bargaining position is slowly weakening.

"They might know well that the Korean market is fully open and General Motors is manufacturing here in Korea through its affiliate GM Daewoo Auto & Technology."

"As the Korea-EU FTA was signed and expected to be ratified soon, US will lose the opportunity for better business position in Korea."