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Out in the cold

Protectionists on both sides of the Pacific have stalled a trade pact between the U.S. and South Korea.

December 06, 2006

THE SKIING ISN'T ideal in Big Sky, Mont., thanks to a lack of snowfall, but temperatures are cold enough to support the man-made variety. It seems to be equally frosty inside a resort conference room where South Korean and American representatives are trying to cement the United States' biggest trade deal since the North American Free Trade Agreement.

Underway is the fifth round of talks on a bilateral pact supported by President Bush and South Korean President Roh Moo-hyun. The stakes for both countries are high and go beyond mere economics -- though the economies of both nations would benefit from a pact. A failure would further strain already frayed relations between the U.S. and South Korea and could push Seoul nearer to China's political and trade orbit.

Despite such considerations, there doesn't seem to be much urgency in Montana. This was supposed to be the final round of talks, but with agreement lacking on even relatively easy issues in earlier rounds, they are expected to continue next year. With Bush's fast-track trade authority expiring in July, a deal needs to be finished by March to allow time for congressional review. Yet on Tuesday, there was still no sign of progress.

There are a number of contentious matters on the table, including South Korea's restrictions on U.S. beef and rice and U.S. anti-dumping rules that South Koreans say have unfairly punished their high-tech manufacturers. Probably the biggest snag is automobiles: South Korea puts heavy tariffs and taxes on imports and imposes safety and environmental regulations that make it difficult for foreign automakers to compete.

These clearly have to go, but that's not enough for Detroit. U.S. automakers are demanding that cuts to U.S. tariffs on South Korean vehicles be tied to measurable gains in market share for U.S. cars in South Korea. They don't just want a level playing field -- they want sales guarantees. It's an absurd notion that, distressingly, is embraced by Rep. Sander M. Levin (D-Mich.), who is likely to chair the House Ways and Means Committee's trade subcommittee next year.

Meanwhile, among South Korea's more nonsensical trade quirks is its restriction on U.S. beef, which is based on overblown fears of mad cow disease. That should be jettisoned as well.

With $72 billion in trade last year, South Korea is the United States' seventh-biggest trading partner. A successful free-trade agreement would be an achievement in itself and would lay the groundwork for an even bigger deal with Japan. Such an agreement is too important to be derailed by a protectionist minority in both countries.

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