Bush Administration Provides Partial Korea FTA To Congress

The Bush Administration mid-week provided Congress parts of the text for the newly concluded free trade agreement with Korea but has not committed to a deadline of when it will provide the full text, according to congressional aides.

The Office of the U.S. Trade Representative submitted "more than half" of the FTA text to Congress and cleared industry and agriculture advisors who will have to assess the agreement for a formal report to Congress within a month, Assistant U.S. Trade Representative for Japan, Korea and APEC Wendy Cutler said on April 5.

But a critic of the FTA said that the text provided does not cover many of the controversial issues that were settled in the last round of negotiations that ended on April 1.

Deputy U.S. Trade Representative Karan Bhatia said on April 2 the U.S. and Korea are in the process of "writing up" the agreement after their final marathon negotiating session, but he emphasized that was not unusual.

"There is always additional legal drafting that needs to occur, so we'll be doing that," he said.

Unresolved is the issue of which standards the FTA should contain with respect to labor and the environment. USTR says the text now reflects the obligation for each signatory to enforce its own laws, a standard that House Democrats have criticized as insufficient and are seeking to strengthen in discussions with the Administration for a new FTA template.

As a result of these on-going efforts, there "may be a need" to revisit the labor and environment issues, Bhatia said. He signaled that Korea was not happy with the fact that there was no final U.S. government position on the labor and environment provisions. "[If] it turns out that there are changes that would need to be made on labor and environment in order to obtain congressional passage, . . . we'll make a decision jointly as to whether those changes would be acceptable to Korea," he said.

Bhatia emphasized that Korea is a "different case" in terms of labor rights compared to other countries with which the U.S. has concluded FTAs because it has strong labor rights and strong unions.

USTR has taken the position that an FTA can still be changed over the next 30 days up to the deadline when U.S. industry advisors have to complete their assessment of the deal, according to a USTR spokesman.

The Bush Administration on April 1 formally notified Congress of its intent to sign the FTA just "minutes before the expiration of the [statutory] deadline" of midnight, and this was possible because Congress agreed to have someone available to formally receive the letter of notification at that time, the spokesman said.

Congress was out of session at that time, but the fast-track law does not contain a requirement that Congress be in session to receive the formal notification of an Administration's intent to sign a trade agreement, according to a Senate aide. Therefore, the Administration met the statutory requirements of the fast-track law, he said. Separately, a USTR spokesman said the deadline for the submission of the notification was determined after consultations with Congress and an internal assessment by USTR lawyers.

U.S. negotiators had initially told their Korean counterparts that the deadline was late March 30 in Washington, D.C.

The fast-track law provides that a trade agreement can be signed 90 days after the administration formally notifies to Congress its intent to do so. Notifying the Korea FTA on April 1 means it can be signed before fast track expires on July 1 this year. Once a trade agreement is signed, it can be considered under fast track with an up-or-down vote even after the law itself has expired.

Bhatia also said the Korea FTA will pressure other Asian economies to negotiate FTAs with the U.S. "To be honest with you, there is a possibility that a successful Korea-U.S. FTA will be the stepping stone to a wave of liberalization in East Asia."

He also said the FTA with Korea contains stronger commitments than any other FTA negotiated by the U.S. in such areas of financial services, transparency and competition.