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G20 Seoul Summit 2010

G20 Seoul Summit 2010

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Published by: Chris Atkins on Oct 29, 2010
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Amy Jackson - President

American Chamber of

Commerce, Korea

go to Korea for being
selected as host to
the November 2010
G20 Summit! Clearly
this summit will fo-
cus the attention of
business and politi-
cal leaders on many
key issues of impor-
tance to the G20 membership and
beyond, and there are a wide range
of anticipated outcomes. Seoul has
been busily preparing for this event
for months, and it is very aware of
the myriad of benefts that hosting
this global event can and will bring
to South Korea. One of these is to
showcase the Korea of 2010 – a
country willing and able to act as a
global leader. In addition, Koreans
and Americans from the public and
private sectors are anxiously await-
ing a show of leadership by Presi-
dent Barack Obama and President
Lee Myung-bak in the form of an an-
nouncement that the two countries
are fnally ready to move forward
with the long-anticipated ratifcation
of the U.S.-Korea Free Trade Agree-
ment (FTA).

Reintroducing Korea to the
World As a Leader

Many foreign visitors to Korea
express surprise at how modern,
always “connected,” and bustling
Seoul is. Indeed, there is a distinct
lack of knowledge in the United
States and many other countries
around the world about what really
does and does not characterize the
Korea of 2010. Many remember the
Korea of 50-plus years ago in the
aftermath of the devastating Korean
War. Perhaps more still think of Ko-
rea as the insular, command econo-
my it was 20 years ago. As host of
the G20 Summit, Korea has a unique
opportunity to “re-introduce” itself to
the world as the modern, free na-
tion Korea is today – one which has

changed quite dramatically in the
last 50-plus, 20 and even 5 years.

On the economic front, Korea is
already a leader. In 2009, accord-
ing to the International Monetary
Fund, Korea ranked as the world’s
15th largest economy (by nominal
GDP) and the ninth largest exporter.
Not only do Korean companies such
as Samsung, LG, Hyundai/Kia and
POSCO now dominate in many mar-
kets around the world, but there is a
new and growing recognition among
world consumers that these compa-
nies are South Korean – giving rise
to the new South Korean “brand.”
Korea’s economic success is linked
to the country’s focus on promoting
exports. Exports provided around
44 percent of Korea’s GDP in 2009.
Korea’s strong performance in the
export of manufactured goods has
been crucial not only to the coun-
try’s rapid industrial development,
but also to Korea’s robust recovery
from economic recessions, once in
1998 and again in 2008. It has also
strongly shaped Korea’s pro-free
trade economic policies.

Korea – A Leader on Free Trade

In the face of rising protection-
ist sentiment around the world, a
key agenda item for the G20 Seoul
Summit is how to ensure free and
fair global trade. The G20, as to-
day’s premier forum for discussing
global economic issues, has already
played an important role in con-
taining the spread of protectionism
during the recent global economic
crisis. As a globally-competitive
mid-sized economy that has reaped
signifcant benefts from cross-bor-
der trade and investment, Korea has
a fundamental interest in promoting
free and fair global trade.

At the G20 summit in Wash-
ington D.C. in 2008, President Lee
Myung-bak took a leading role in
advocating free trade, suggesting a
‘standstill’ on all protectionist mea-
sures. This concept was accepted
by the other participants, and many

believe that the coordinated re-
sponses by the leading economies
played a crucial role in preventing a
deeper global recession. However,
as the recent surge of trade disputes
show, protectionist sentiments have
not completely disappeared. Joint
efforts are needed to reduce new
forms of trade barriers, and Korea
has a key role to play in regard.

FTA Leaders and Laggers

The number of bilateral and re-
gional free trade agreements (FTAs)
has sky-rocketed in recent years.
The United States was one of the
quicker countries out of the gate
on FTAs, but we have now fallen
way behind. The U.S. currently has

FTAs in force with 17 countries,
but is not actively negotiating new
agreements. On the fip side, Ko-
rea was slow to jump on the FTA
bandwagon, but is now one of the
world leaders in terms of number
of FTAs (concluded or in the works)
and volume of trade covered by its
agreements. As the diagram shows,
Korea has completed or is currently
negotiating FTAs with many major
trading partners. Likewise, Australia
has FTAs with 15 countries, and is
currently negotiating FTAs with over
10 countries.

At a time when so many coun-
tries around the world are moving
forward rapidly to secure preferential
access to other markets for their pro-
ducers, the absence of the United
States in this “race” is quite appar-


Summit 2010



Summit 2010


ent. It is disappointing that anti-free
trade sentiment in the United States
has grown to the point that many
Americans are openly advocating a
return to protectionism and isola-
tionism. Messages as to the very
real benefts of free trade seem to
have been drowned out, particularly
in the aftermath of the global eco-
nomic recession. But the reality is
that the United States is signifcantly
more open to imports from around
the world than many of the countries
where U.S. exports are headed. By
eliminating high tariffs and restrictive
non-tariff barriers to trade, FTAs can
be very effective as a tool to level
the playing feld for American busi-
nesses and as a means to increase
exports and create jobs.

A study commissioned by the
U.S. Chamber of Commerce found
that total trade with the fourteen
countries with which the U.S. has
FTAs boosted GDP by $1.0 trillion
and supported 17.7 million Ameri-
can jobs. Of this total, an estimated
5.4 million jobs were supported by
the increase in trade generated by
the FTAs. Moreover, the study found
that U.S. merchandise exports to
these fourteen countries from 1998
to 2008 grew nearly three times as
fast as did exports to the rest of the

portant Step Forward

President Obama’s announce-
ment in June of this year at the
Toronto G20 summit was a pivotal
moment for watchers of U.S. trade

policy. President Obama stated that

“It is time that our United States
Trade Representative work very
closely with his counterpart from
the ROK to make sure that we set
a path, a road, so that I can present
this FTA to Congress. We are go-
ing to do it in a methodical fashion.
I want to make sure that everything
is lined up properly by the time that
I visit Korea in November. And then
in the few months that follow that, I
intend to present it to Congress. It is
the right thing to do for our country.
It is the right thing to do for Korea.
It will strengthen our commercial
ties and create enormous potential
economic benefts and create jobs
here in the United States, which is
my number one priority.”

This was an important message
to Korea and the rest of the world
that the United States is a good ally
that honors its commitments, puts a
priority on staying actively engaged
in Asia, and plans to continue to be
a leader in the region on the political
as well as economic front.

The U.S.-Korea FTA is the most
comprehensive and large-scale
trade agreement the United States
has entered into since the North
American FTA (“NAFTA”) took ef-
fect in January 1, 1994. Under the
agreement, almost 95 percent of
bilateral consumer and industrial
goods trade will become duty-free
within three years, with almost all re-
maining tariffs on goods eliminated
within ten years.

But the U.S.-Korea FTA covers
more than just reduction of tariffs.
The agreement has robust provi-
sions in the areas of regulatory
transparency, intellectual property
rights, pharmaceuticals and other
rules, particularly in the area of ser-
vices. This is why it is often referred
to as the “Gold Standard” agree-
ment by trade experts. Consum-
ers and businesses in both coun-
tries stand to gain from the broad
benefts of the agreement, as it will
eliminate non-tariff market access
barriers to goods, services and
investment. Moreover, new and
mutually-benefcial partnerships be-
tween leading American and Korean
businesses are expected to fourish
in virtually all sectors including future
‘engine of growth’ industries such
as energy, green growth and bio-
pharmaceutical sectors.

The benefts of the U.S.-Korea
FTA to both economies have been
well documented by researchers.
Apart from the economic benefts,
the deal will reinforce the strategic
alliance between the U.S. and Ko-
rea which remains one of America’s
closest allies in Asia and a strong
partner in advancing regional secu-
rity. In addition, this FTA will help
the United States stay an active,
involved leader in the Asia-Pacifc

We look to the United States
and Korea to demonstrate leader-
ship during the G20 Seoul Sum-
mit. The opportunities are vast and
in today’s economic climate cannot
and should not be squandered. We
hope that on November 11, the U.S.
and Korean Presidents will stand
together and make an historic an-
nouncement on the U.S.-Korea
Free Trade Agreement that will dem-
onstrate the commitment of both
countries to each other and to mak-
ing their G20 pledges a reality.



Summit 2010



Summit 2010



Summit 2010


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