Levin Floor Statement in Support of South Korea Free Trade Agreement

Oct 12, 2011 Issues: Trade

Ways and Means Ranking Member Sander Levin (D-MI) today delivered the following statement on the floor of the House of Representatives in support of the U.S.-South Korea Free Trade Agreement:

This is an important discussion and I want to be clear what is really at stake here. It is the automotive industry of this country, but it's more than that. There's a basic principle involved in the Korea FTA issue. And that is whether we will replace one-way trade with two-way trade.

“When this was negotiated by the Bush administration, it failed to take the most important step relating to Korea. They were shipping hundreds of thousands of cars to the United States. We were shipping at that time less than 10,000. So this indeed, while it mainly involved automotive and that was 75 percent of our deficit, it was even more than that. Opening up markets for our goods produced in the United States of America. This was a Make it in America issue. And there was a Korean iron curtain against our products. By the way not only automotive, but refrigerators and others.

“The number one priority of the Koreans was to eliminate the 2.5 percent U.S. tariff. Because if you ship 600,000, 700,000 cars, that's a lot of money. We said to the administration, ‘No way.’ We were not going to let the Korean free trade agreement be approved if it continued to embody one-way trade. The Korean ambassador met with Mr. Rangel and myself often and the trade minister and they said, ‘We aren't going to talk about it.’ And we said, ‘Well, if you don't talk there'll be no agreement.’

“Then what happened was that the new administration, the Obama administration, began to work on this issue. And what happened there were major changes in the agreement. Instead of the elimination on the tariff on most vehicles immediately, it was delayed until the fifth year. On trucks, it was delayed for eight years, to give time to make sure that the one-way street became a two-way street. That has been accomplished.

“To make entirely sure of this, there were provisions to make sure they could no longer use their tax provisions and their environmental standards to keep out our products. And to make it even safer, we made sure that there was a safeguard, so if there's a surge of automotive products into the United States, we could defend ourselves. That was unique. And that's why the Big Three are saying the following, I quote – ‘As representatives of the largest exporting sector this FTA will open up an important market for Chrysler, Ford, and GM exports. Our companies make the best cars and trucks on the road and we are excited for the export opportunity this agreement represents.’

“That's why the UAW has indicated its support, because workers making their cars will now be able to see that their cars can be shipped to Korea. And Ford has said they're going to use Korea as a base to penetrate with American products the markets of the rest of Asia.

“So that's why this is all about. Now, it won't be China getting into the U.S. it will be the U.S. getting into Korea. That's really what this is all about. I want to say a word about the issue relating to -- relating to issues of transshipment. We insisted in the FTA that there be provisions relating to transshipment. I want to quickly refer to them. If customs has any doubt about a shipment, it can require Korean exporters to provide documentation showing that the goods qualify for FTA treatment. If a Korean exporter refuses or the document is not acceptable, customs can deny FTA treatment to the good. U.S. customs can also do site visits --  this is something different -- to Korean facilities -- factories to verify information and if our customs officials are denied access or the visit shows problems, they can deny entry to the Korean goods and exporters who intentionally or repeatedly make false claims are subject to penalties. I have a letter embodying this from U.S. customs and border protection. …

“I also want to quote the letter from the statement from the Motor and Equipment Manufacturers Association. It says as follows: ‘The pending FTAs offer real opportunities for parts manufacturers and our employees in two of the fastest growing regions: Asia pacific and South America. We can ill afford to neglect these and other markets as key competitors.’

“So that's what the issue is here today. We face a one-way market with impenetrable barriers. These are now being torn down. This is a jobs bill. This is a jobs bill. We have to be able to compete and our auto industry can now compete. In order to be able to compete effectively, we have to tear down the markets of other countries and make sure our markets are not only open to them but their markets are open to us. We worked very hard to make this happen. It wasn't an easy job. There were times when the administration, perhaps the new one, the Obama administration, was going to settle for something less than was necessary. We pressed, we pressed effectively. The Obama administration rose to the occasion and in the end said to Korea, ‘You must agree to open the market, or we will not send this agreement, this revised agreement, to the U.S. Congress.’ This revised agreement has now been sent here. I urge its support.”