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With American companies panicking that a trade agreement between the European Union and South Korea is poised to rob them of millions of dollars, business groups are increasing pressure on Congress to pass a similar deal this summer.
While much of the debate surrounding the long-stalled agreement between the U.S. and Korea has focused on American automobile parts, pork and benefits for out-of-work Americans, the financial services and medical devices industries have become key players in the last-minute campaign, highlighted this week by a U.S. Chamber of Commerce tour of key districts.
The business lobby is also running print and Internet advertisements threatening massive job losses if a U.S.-Korea trade deal is not passed by Friday, when the country will open its borders to thousands of European products at a reduced or entirely duty-free rate.
The lobbying effort comes at a pivotal time for the Korean pact and for similar deals with Colombia and Panama. Senate Finance Chairman Max Baucus (D-Mont.) and the White House announced an agreement Tuesday to add to the Korea pact an expansion of the trade adjustment assistance program, which provides benefits to workers who lose their jobs because of international trade. Adding those provisions could help clear the way for a vote on Korea and the other free-trade deals.
But that fix is not without controversy. Already, crucial Republicans, such as Senate Minority Leader Mitch McConnell (Ky.) and Finance ranking member Orrin Hatch (Utah), have said they oppose adding trade adjustment assistance to the Korea pact.
No matter how fast Congress moves, getting a deal passed by July is all but impossible.
Meanwhile, lobbyists are stepping up pressure to pass the trade deals. American exporters say Congress’ failure to act could put them at an instant disadvantage with European competitors when the EU agreement goes into effect Friday. Both the EU and the U.S. exported just less than $30 billion worth of goods and services to South Korea in 2009, according to World Trade Organization data, and they compete across all major sectors.
Under the EU’s agreement, for example, the Korean tariff on medical devices from European companies will drop immediately from an average of 5.4 percent to 1 percent, giving European device companies a 4.4 percent price advantage over American companies. In 2009, the U.S. exported about $859 million in medical devices to South Korea, compared with the $839 million sold by European companies, according to the WTO.
“Many hospitals here do multiyear contracts, so locking this in will have implications for many years to come,” said Amy Jackson, president of the American Chamber of Commerce in South Korea, a group that encourages trade.
To drive home this point, the U.S. Chamber’s pro-trade, grass-roots campaign — with Korean ambassador Han Duk-soo in tow — is swinging through Syracuse, N.Y., today to visit medical device-maker Welch Allyn and Reps. Ann Marie Buerkle (R-N.Y.) and Bill Owens (D-N.Y.).
On Monday, the chamber delegation met with executives at Prudential in Newark, N.J., and on Tuesday, with employees of defense contractor Raytheon and an aide to Sen. John Kerry (D-Mass.).