Wednesday, 5 October 2011

US South Korea free trade deal clears first hurdle

US President Barack Obama and South Korean President Lee Myung-bak The trade deal is expected to dominate President Lee Myung-bak's visit to the US later this month
The free trade agreement between the US and South Korea has cleared the first hurdle four years after the deal was first agreed.
The House Ways and Means Committee has voted to advance US free-trade agreements with South Korea, Colombia and Panama to the full House.
The push for a swift approval of the deals comes amid a slowdown in the US economy and high rates of unemployment.
Backers of the deals said they will boost US exports and create jobs.
"With zero jobs created last month and the unemployment rate hovering around nine percent, we must look at all opportunities to create American jobs," said David Camp, chairman of the House Ways and Means Committee.
Tariff concerns The deal with South Korea is the largest US trade pact since it signed the North American Free Trade Agreement in 1994.
According to some estimates, it is expected to increase US exports to the Asian economy by as much as $10bn (£6.5bn).
Though the deal was agreed in 2007, there had been concerns in the US over tariffs imposed by South Korea on the US carmakers.
The two sides finally managed to reach an agreement on the issue last year. South Korea said it would halve its tariff on US cars to 4% and lift it completely in four years.
At the same time, US said it would also lift its 2.5% tariff on Korean cars during that period.
South Korea had also agreed to allow the US to export up to 25,000 cars a year that do not meet its more stringent safety requirements.

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