Secretary's Speech

Secretary of Commerce Carlos M. Gutierrez
Korea Economic Institute
Washington, D.C.

Thank you, Jack, (Pritchard, KEI President) and thank you for inviting me to join you at today’s program to celebrate the achievements of Korean-Americans and discuss one of the most important initiatives facing our two countries today—the U.S.-Korea Free Trade Agreement.

First, I’d like to congratulate the Korea Economic Institute on your 25th anniversary. KEI has helped deepen understanding among Americans about developments in Korea, and the value of the Korea-U.S. relationship.

I’d like to thank Ambassador Pritchard and the KEI staff for their efforts to educate members of Congress on the benefits of an FTA, and bring our countries closer together to make the U.S.-Korea FTA a reality.

On the occasion of Korean-American day, it’s appropriate we first recognize the cultural and economic contributions Korean-Americans have made.

The richness of our great nation is in the character, diversity and passion of our people, the abundance of our ideas and the entrepreneurs in our economy—Korean-Americans contribute greatly in all aspects.

President Bush has a strong vision for minority entrepreneurship and business ownership. The pro-growth policies of this administration have helped our economy flourish.

• We have experienced 52 straight months of job growth and unemployment remains historically low.
• Our unemployment rate is below the average of each of the past four decades.
• Third quarter GDP growth was a solid 4.9 percent.

Through entrepreneurship and innovation, Korean-Americans are playing a major role in strengthening our economy, growing jobs and keeping America competitive.

Most recent Census numbers show that there were 1.1 million Asian-American-owned businesses in 2002, an increase of 24 percent from 1997, twice the rate of increase of the national average for all businesses.

More than 300,000 Asian-owned businesses had paid employees, with business revenues totaling more than $291 billion.

Korean-Americans are making their mark in all walks of life, including business, law, politics, education, community service, the arts and science.

The Commerce Department will continue to fully support the larger Asian American and Pacific Islander community through federal programs, and helping them achieve the American dream.

One of the most significant ways we can help people achieve that dream is by creating jobs and economic opportunities through free trade agreements.

The President recently signed the Peru FTA, but there are three more pending before Congress—Colombia, Panama, and as you well know, South Korea.

We are making a tremendous effort on each agreement, with Colombia being the most pressing. I have been to the country three times in the last few months, each time bringing members of Congress. Colombia is an essential agreement with an ally on our own hemisphere, and the economic and geopolitical implications are critical.

As we make progress on Colombia it is very important for us to resolve the outstanding issues on beef with Korea, so we can begin our efforts with Congress on this important FTA.

The government of the Republic of Korea has shown great leadership in their support of the FTA.

In spite of a vocal and determined minority of domestic opponents, President Roh’s economic team has vigorously defended this FTA from the beginning. They have done an outstanding job of educating the Korean public and the National Assembly about the benefits.

They have also worked closely with us in educating members of Congress about the importance of the FTA to the overall bilateral relationship. President Bush looks forward to continuing our cooperation on the FTA and other important economic and strategic issues with President-elect Lee after he takes office next month.

Let me emphasize one critical point for advancing the FTA approval process: Korea needs to fully reopen its market to U.S. beef, consistent with World Organization for Animal Health guidelines.

U.S. beef is safe. It’s only fair to give us access. Congressional leaders have made it clear that they will not be in a position to support this Agreement until the Korean market is fully reopened to U.S. beef products.

Overall, the KORUS FTA has strong support among a wide array of business sectors that increasingly recognize the importance of the agreement.

Korea is a large economy with great potential. This agreement will provide U.S. exporters access to 48 million consumers with an $888 billion economy and a per capita income of nearly $20,000 a year.

Korean consumers would benefit from lower prices on U.S. products and greater access to U.S. services while Korean exporters would gain an edge over other countries to the vast U.S. market

I am confident that support will grow for this FTA as Americans learn the facts about the benefits.

Let’s take a look at some of those facts:

• This is the most commercially significant bilateral trade deal for the United States in the past 15 years.
• Nearly 95 percent of bilateral trade in consumer and industrial products becomes duty-free within three years of entry into force.
• More than half, or $1.6 billion, of current U.S. farm exports go duty-free immediately.
• The agreement includes unprecedented commitments by Korea on market access for services, including financial services, telecommunications, and express delivery, among others.
• This FTA boasts state-of-the-art rights and protections for investors, new strong competition law provisions and substantial new protections for intellectual property rights.
• It also includes stronger labor and environmental safeguards than we’ve included in our previous FTAs.
• And the agreement contains strong and unprecedented provisions that level the playing field for U.S. automakers in a market in which their ability to compete fairly has long been thwarted.

The FTA is a genuinely historic undertaking—a cementing of ties between two of the world’s most significant industrial economies and a bellwether of the United States’ economic role in East Asia.

America’s relative position in East Asia is being challenged. Of 34 Asian economies surveyed for which we have data, the U.S. market share has decreased in 27 since 1990.

We must actively engage in the region, breaking down barriers to U.S. exports. We must compete with our other major trading partners, all of whom are working to enhance their own competitive position in the region.

If unable to enact a strong and comprehensive FTA that so clearly benefits the United States, U.S. credibility in Asia could be seriously compromised.

Fearing U.S. disengagement from the region, Korea and other emerging-market economies of the region will approach more willing trading partners and establish preferential agreements with them.

In fact, Korea is currently negotiating FTAs with the EU, Canada, ASEAN, Mexico, and India and is considering launching FTA negotiations with China.

Rather than being at the forefront of trade in the region, shaping developments, the United States will run the risk of lagging further and further behind.

On the other hand, approval of the Korea FTA promises substantial benefits for years to come, as other Asian countries will look to follow Korea’s lead, in building a stronger relationship with the United States and reforming their own economies. U.S. credibility in the region will grow, and with it, our economic position.

It’s clear that the KORUS FTA will benefit American workers, farmers, manufacturers and service providers. But this agreement is not just significant economically.

In foreign policy circles, the significance of the KORUS FTA to U.S.-Korea relations and to America’s strategic interests in North Asia has become clear.

We must not forget that Korea borders a country led by a vision far different from our own. We must not take for granted that our vision of open markets and economic freedom is the only idea being promoted in the world.

This FTA allows us to strengthen our engagement with a key ally in a strategically-important part of the world.

I am optimistic that Congress will see the critical importance of the Korea FTA. I believe the U.S.-Korea FTA is simply too important to be allowed to fail.

What proponents of the FTA must do in the months to come is answer critics with facts, and make sure that a small but vocal minority does not derail an agreement from which so many stand to benefit.

The United States and Korea have a half-century long relationship. This agreement is an opportunity for a great friendship to grow even deeper. Korea is a strong and trusted ally of the United States, and the U.S.-Korea Free Trade Agreement is significant step forward for a significant partnership. Thank you.