(Washington D.C.)- With the beginning of formal negotiations for a U.S. - South Korea Free Trade Agreement (FTA), U.S. Rep. Sander Levin (D-MI), a senior member of the House Ways and Means Trade Subcommittee, today warned that a U.S. - South Korea Free Trade Agreement must meaningfully address persistent unfair trade practices by South Korea that have for too long discriminated against the U.S. automotive sector.

"This trade negotiation stands as a test for how strongly the Bush Administration will fight for the U.S. automotive industry," said U.S. Rep. Levin.  "As the world's fifth largest producer of autos and the third largest exporter, South Korea takes full advantage of open markets while keeping their market closed. 

"With the failure of passed agreements to achieve results, U.S. negotiators must insist that South Korea demonstrate they are opening their markets through specific and sustainable benchmarks before we allow more access to our markets. Korean trade must be a two way street before we allow more of their imported cars on the road.

"The health of the domestic automotive industry is vital to the U.S. economy.  We have cars and parts to sell abroad and if the Administration fails to knock down Korea's unfair trade barriers this FTA will hit a stonewall in Congress," concluded Levin.

To build support for increased market access for U.S. autos in South Korea's market, Levin, and U.S. Reps. Fred Upton (R-MI) and Dave Kildee (D-MI), are circulating a bipartisan "Dear Colleague" letter in the House encouraging Members to sign a letter to the United States Trade Representative requesting the Administration take the steps necessary to fully open South Korea's closed automotive market.

"This could be our last opportunity to address the harmful and unbalanced automotive trade we have with South Korea," said U.S. Rep. Kildee. "The American automotive industry and American autoworker jobs are at risk in this agreement and it's time for the Bush Administration to step up to the plate."

Currently, Korea is the world's fifth largest producer and the third largest exporter of autos, exporting seven out of every ten vehicles it builds.  While Korea takes advantage of open markets for its exports, its own domestic market remains virtually closed.  Import market share in Korea from all over the world is 2.7% compared to 37% foreign import share in the United States. American automobile and auto parts manufacturers have been virtually shut out of the South Korean market for decades. This has been the case despite two bilateral auto agreements (MOUs) signed in the 1990s aimed at opening the South Korean market.  For the past five years, the disparity in auto trade has ranged between one-half and two-thirds of the total U.S. goods trade with Korea. 
           
The Administration should require Korea to first demonstrate that its market is open by reaching and sustaining specific and measurable benchmarks before the U.S. agrees to preferential access for Korea?s vehicles by lowering U.S. auto tariffs.  A key benchmark would be significant improvement in import market share that is in the range of the average for members of the Organization for Economic Cooperation and Development (OECD).  To make this happen, Korea must also undertake a comprehensive dismantling of its longstanding auto non-tariff barriers.  The U.S. auto industry is facing a very difficult period that puts the jobs of tens of thousands of hard-working Americans at risk.  

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