Good morning. I would like to welcome all of you, especially South Korean Ambassador Han, to today’s Trade Subcommittee hearing on the U.S.-South Korea trade agreement. Today’s hearing is the third in our series of hearings on each of the pending trade agreements: Colombia, Panama, and South Korea.
As I have said at each of the previous hearings, I firmly believe that we should consider all three agreements by July 1. I welcome the Administration’s announcement yesterday that it has reached agreement with Colombia. I look forward to quick movement on the action plan and to working with the Administration to ensure submission of all three agreements for Congressional consideration by July 1. All three pending trade agreements are good agreements. The time to move forward with all three is now.
I know that many Democrats share our sense of urgency. With respect to KORUS, we all know that the EU-South Korea trade agreement is expected to enter into force by July 1. Implementation of agreements by other countries, and continued inaction on our agreement, will result in further missed opportunities to create U.S. jobs. In fact, it will result in a decline in existing U.S. jobs. We either move forward, or we fall backward. The choice is ours. Staying still is just not an option.
The economic benefits of the pending trade agreements are overwhelming. The ITC estimates that the three pending trade agreements together would increase U.S. exports by at least $13 billion and add $10 billion to U.S. GDP. And President Obama has stated that such an increase in U.S. exports could support 250,000 jobs.
These benefits are enjoyed broadly. For example, the American Farm Bureau estimates that U.S. farm exports to South Korea could increase by more than $1.8 billion annually. Moreover, 90% of all American companies exporting to South Korea are small and medium sized enterprises. Implementation of the agreement will lead to an additional $2.8 billion in exports for small and medium sized American companies.
This agreement, like the Colombia and Panama deals, would level the playing field for U.S. exporters. The average South Korean tariff for U.S. exporters is more than four times the average tariff that South Korean products face in the U.S. market. The agreement would address this imbalance. The state-of-the-art Korea agreement – like the Colombia and Panama agreements – will address key non-tariff and regulatory barriers such as sanitary and phytosanitary barriers, requiring strong protection of intellectual property rights, requiring greater regulatory transparency, and encouraging greater regulatory harmonization and the use of international standards.
We also cannot overlook the fact that South Korea is a key ally in a critical region of the world. The U.S.-South Korea trade agreement is important not only for its economic benefits but also for our national security. Just today, I received a letter signed by a number of former senior officials in trade and foreign policy highlighting the key geostrategic role that Korea plays and urging Congress to pass all three agreements as quickly as possible. Without objection, I would like to enter this letter into the record.
Now that I have highlighted some of the benefits of the U.S.-Korea agreement, I would like to set the record straight on a few points:
First, Republicans are excited about moving forward on the Korea agreement, just as we are excited to move forward with the Panama and Colombia agreements. Our goal is simply to speed up our Latin American agreements to catch up with the Korea agreement! There is a sense of urgency for all of them, as these trading partners are moving ahead without us to conclude agreements with our competitors that don’t include us.
Second, our view that all three agreements must be considered is not simply a Republican view. Key Democrats such as the Chairman of the Senate Finance Committee explicitly agree with this view. Strong bipartisan support for all three was also clear from the strong statements of support that were issued yesterday in response to the Administration’s announcement about Colombia.
Third, despite what some are saying, we’ve already started the bipartisan technical drafting work on the Korea agreement with the Administration. On March 7th, Chairman Camp agreed to Ambassador Kirk’s written request to begin technical discussions on the draft implementing bill, noting that discussions between Congressional and Administration staffs were scheduled for later that day. Those technical discussions are ongoing, and we are awaiting responses to questions that staff on both sides of the aisle have raised with USTR. We are working constructively together to move forward in a timely manner to ensure that the draft implementing bill is complete and thorough.
At the same time, I urge the Administration to work with us on this technical work for the Colombia and Panama agreements too. Both Ambassador Kirk and Ambassador Sapiro have made clear that the resolution of any outstanding issues will not require changes to the text of the agreement. I believe we should start this technical work immediately to ensure that the drafting is complete and thorough and that draft implementing bills are ready to go. We can’t waste any more time.
I would like to welcome all of our witnesses today and thank them for being with us. I look forward to hearing the testimony of both panels.