US business lobby groups reacted enthusiastically to news last Thursday that the United States and South Korea would start trade talks to remove barriers to firms doing business in both countries, and called for a deal that would expand US exports. US Trade Representative (USTR) Rob Portman made the announcement at the US Capitol building, together with South Korean Trade Minister Hyun-chong Kim.

South Korea is the world’s 10th largest economy, with an annual GDP rapidly approaching one trillion. The Asian country is the United States’ seventh largest export market and is the fifth largest international market for US agricultural goods. The prospective deal with South Korea would be the largest free trade agreement (FTA) for the US since the North American Free Trade Agreement (NAFTA), which joins the United States with Mexico and Canada. US business groups welcomed the news and said they will work to shape the difficult talks ahead. The National Association of Manufacturers (NAM) said it was “enormously pleased” by the announcement. “An FTA with Korea would be a big deal for US manufacturers,” said NAM President John Engler. Industry insiders say the talks will not be easy.

Korea currently has high tariffs and various non-tariff barriers (NTBs) facing many US exports.

“South Korea already is a very important market for the United States, but we do not have a level playing field,” said Harold McGraw III of the Business Roundtable, a pressure group.The US Chamber of Commerce said the deal should not exclude any product or service. “A mutually beneficial FTA will advance US business interests by improving market access for agricultural and manufactured goods, opening services markets, and enhancing intellectual property and investor protections,” said US Chamber President Tom Donohue.

Last month, watchdog groups lamented the closeness of industry and business groups in the United States to trade decision-making. ActionAid International said its research found that 93 per cent of external advisors to the US trade agency come from corporate lobby groups and multinational companies. Civil society groups and some developing nations have called for a slower pace in trade negotiations, arguing that the benefits of market liberalisation have been wildly exaggerated and mostly go to multinational corporations and the local elites in developing countries.

Korean farmers took to the streets to protest a meeting of the World Trade Organisation last December in Hong Kong that sought to liberalise trade in agriculture. Washington has stepped up its efforts to open new markets to US goods through a spate of bilateral and regional trade deals and through multilateral talks at the World Trade Organisation. The Bush administration has put FTAs into effect with Jordan, Chile, Singapore, Australia, and Morocco and completed talks on FTAs with Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Bahrain, Oman and Peru. The USTR office says that talks are underway or about to begin with 11 more countries, including Panama, Colombia, Ecuador, Thailand, the five nations of the Southern African Customs Union and the United Arab Emirates. — IPS