Chapter 2:  KORUS Free Trade Agreement: A Lost Year, by Michal Petrik

Michal analyzes the various political, economic and social changes that occurred within the United States and South Korea that worked to prevent the ratification of the Korea-U.S. Free Trade Agreement (KORUS FTA) in 2008. He asserts that the victory of Lee Myung-bak in the 2007 presidential elections and his Grand National Party in the 2008 parliamentary elections put strong proponents of the KORUS FTA into power, while at the same time, the Democratic Party’s loss of power deeply influenced its stand on the FTA; thus the party that initially started the trade negotiations quickly became the FTA’s greatest opponent. Similar political obstacles to KORUS FTA ratification arose on the U.S. side as well. Leading up to the November elections, movement on all FTA discussions was deadlocked due to an impasse between the Republican administration and Democratic-majority in Congress. With a full Democratic sweep in the November 2008 elections, Barack Obama became President with his Democratic Party holding majority in both the House and Senate. Although this sweep created the possibility for swift enactment of Obama’s agenda, Democrats have historically opposed FTAs more than their Republican counterparts and key Democratic legislators began to voice heated opposition to the KORUS FTA.

In addition to these high-level political crosscurrents, Michal highlights concerns that arose from civil and business interests in both countries that impacted the ratification process as well. Large protests over U.S. beef imports in Korea manifest into a greater critique of President Lee’s policies in general, and U.S. automakers, trade unions, and beef producers leaned heavily on U.S. congressional members to fight for greater access to Korean markets in an attempt to narrow the seemingly large trade imbalance in these sectors. Despite the failure to get the KORUS FTA ratified in 2008, Michal argues that both sides showed a willingness to make concessions in order to keep the FTA alive, and with greater political stability in 2009, offers hope that ratification is still possible.