Auto Crisis in the U.S. and the Future of the Korea-U.S. FTA: Delay the Ratification or Restore the Balance of Interest?

Abstract

The Korea-US. FTA (KORUS FTA) is a result of aggressive regionalism that addresses a series of age-old bilateral trade disputes and codifies a whole-scale problem-solving process between the two long-time allies. Despite these efforts, the recent global financial crisis and the bankrupt US automotive industry have made it extremely difficult to mutually ratify, the treaty Under these changed circumstances, the US. may request a limited renegotiation of the current agreement. It has already been approximately three years since the agreement, but there has been no positive signal from the US. Congress. In the near future, both countries will have to decide whether to fa the agreement or to delay its ratification indefinitely In renegotiating the FTA, the identification of mutually acceptable concessions and the strategic exchange of that agenda will decide the fate of the agreement. The best option for the two parties would be to accommodate several moderate demands of the U S Congress by attaching separate side letter commitments to the FTA without amending it. If an amendment were to become indispensible, both sides should endeavor to substantially restore the balance of interest between the two economies by striking a package deal of mutual requests on the automobile and beef issues on the one hand and outward processing zones and financial safeguard issues on the other