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Hillary Clinton tells the AFL-CIO she will vote ''nay'' on the proposed trade pact

DETROIT, Michigan – 06/11/07 – New York Senator and Democratic presidential frontrunner Hillary Rodham Clinton has said she will oppose ratification of the US-South Korea Free Trade Agreement, because it would “harm the US auto industry, increase our trade deficit, cost us good middle-class jobs and make America less competitive."

Speaking this past weekend at an event hosted by the AFL-CIO in Detroit, Clinton said, "While I value the strong relationship the United States enjoys with South Korea, I believe that this agreement is inherently unfair."

While many business groups from high-tech to music voiced support for the deal, auto executives at Ford Motor Co. and the Chrysler Group, Daimler Chrysler AG’s US unit, said they would urge rejection because negotiators “failed to do enough” to lift Korea’s high barriers to US-made cars.

“This agreement, as we understand it, will not open the Korean market to free trade in automobiles,” said Steve Biegun, a Ford vice president told the press last month.

South Korea, home to global auto giants Hyundai Motor Co. and Kia Motors Corp., sells more than 700,000 vehicles a year in the US, while US automakers sell only about 5,000 in South Korea.

The appraisal comes despite the fact that both Washington and Seoul have agreed to cut and phase out tariffs on the trade in automobiles, with South Korea also agreeing to change its auto tax system for larger vehicles, which the Bush Administration said discriminated against US auto imports.

The trade pact – known as the KORUSFTA – is due to be signed on June 30, would lower both tariff and non-tariff trade barriers in sectors ranging from agriculture and manufacturing to financial services and telecommunications.

The two countries released a nearly completed text of their draft pact in late May.The trade deal would be the biggest for the US since the North American Free Trade Agreement (NAFTA) went into effect in 1994 and would lead to more than 90% of US exports to South Korea being duty free within three years, according to the Office of the US Trade Representative.

Seoul was under intense pressure from farmers who charged that eliminating protections for rice would destroy the domestic industry, succeeded in keeping the staple food out of the deal.

But Seoul agreed to lower tariffs on other agricultural goods, including US oranges, and, most recently, lifted its ban on US beef imports that went into effect in December 2003 after the first case of “mad cow” disease was reported in the US.

The earliest the Bush Administration could submit the deal to Congress is late 2007, after the US International Trade Commission (USITC) delivers its report on full impact of the agreement.

That could set the stage for a vote sometime next year, but Congressional action could be delayed until after the November 2008 presidential election.

The KORUS free trade pact took 10 months of sometimes bitter negotiations to cobble together with a final week of intense talks that yielded an agreement and allowed it to be submitted to Congress for approval.

Both sides have strongly advocated a deal, saying it would boost economic growth in two countries, which already do more than $75 billion in trade a year.

Estimates vary about how much an agreement could boost bilateral trade.A recently published study by the USITC in 2001 concluded the figure could rise as much as $29 billion.

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FDI in US to Get More ''Transparent'' Scrutiny

WASHINGTON, DC – 08/07/07 – Foreign direct investment in the US will come under closer, ''more transparent'' scrutiny under legislation that recently passed both the House and the Senate; the new mechanism is not expected to make the US business climate less friendly to foreign investment, say some observers, despite claims by foreign investors who say a new, enhanced review process would complicate business decisions.