Friday, December 3, 2010

FTA negotiations:
"Cows and cars" is now just cars?

The Wall Street Journal is reporting that automobile tariffs are the last remaining sticking point in the renegotiations of the negotiations on the KORUS Free Trade Agreement:
U.S. and South Korean negotiators meeting to revive a stalled trade pact are down to one main sticking point, say people familiar with this week's negotiations—leaving the biggest U.S. free-trade deal in nearly two decades hinging on an economically negligible but politically potent issue.

The deal now comes down to whether South Korea will agree to give the U.S. four or five years to phase out the 2.5% tariff it levies on Korean-built cars, these people say, rather than cutting the tariff immediately, as Seoul has sought.
The article notes that normal currency fluctuations — like when something bad happens in China and then a day or so later when investors realize that South Korea is not in China — can themselves make such a small percentage irrelevant.

And here's an enthusiastic hat tip to Ben Muse and his Korea-US FTA blog, which has been doing a fine job of keeping up with the latest news while I've been preoccupied with schoolwork and Yŏnpyŏng-dong. Always happy to support a fellow Freak Stater.

UPDATE:
And the FTA renegotiations have succeeded!

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