Following US president Barack Obama’s visit to South Korea as part of his first tour of Asia, South Korean president Lee Myung-bak said the republic was willing to reopen discussions on automotive trade under the KORUS free trade agreement with the US and address the concerns of its carmakers.
"If automobiles are a problem, we are in a position to discuss them again," he said in a press conference after talks with the US president in November.
Automobiles are a problem as far as US carmakers are concerned. They have been calling for the removal of barriers to US vehicle sales in South Korea and a ‘level playing field’ ahead of the agreement’s submission to Congress. But while they reserve judgement on the latest announcement there are tentatively optimistic responses from the car carriers. Espen Hofland, spokesman for Eukor, one of the principal carriers of Hyundai and Kia vehicles to the US, welcomed the comments from the South Korean leader.
“The statement from president Lee is surely a positive step towards agreeing on the KORUS FTA, which probably would increase the trade between US and Korea even more, also for cars,” he said. “Hence, we might experience increased volumes in both directions in our Korea-US trade lane if the KORUS FTA becomes effective.”
In 2008 alone, Korean auto producers exported more than 600,000 vehicles into the US, while US automakers exported just 10,000 vehicles into South Korea.
That situation is unlikely to improve according to disgruntled carmakers in the US who maintain that, without revision, the agreement would guarantee access by South Korean automotive companies to the US market without reciprocal assurances that US carmakers could improve their sales there. US representative Ron Kirk told the US Chamber of Commerce prior to president Obama’s visit to South Korea that the country should remove barriers to US vehicle sales.
A similar agreement is currently pending between the European Union and South Korea, which has yet to be ratified by EU member states. Sigrid de Vries, spokeswoman for ACEA, the European Automobile Manufacturers Association, welcomed the latest announcement.
“This development is important. It shows that the European Commission's argument [that South Korea was simply not prepared to reopen negotiations] was never, and certainly is no longer, valid,” she told Automotive Logistics. “Like the US auto industry, the European industry seeks an improvement to what is currently on the table. These FTAs mean a lot to South Korea and further improvements are very well possible.”