Charnovitz: Transparency Chapter of KORUS FTA Is Problematic

A third cross-post by Steve Charnovitz:

by Steve Charnovitz

The Korea-US Free Trade Agreement (KORUS) is one of the three pending US free trade agreements that have been negotiated and signed, but not yet approved by the United States. 

Chapter 21 of the KORUS is titled “Transparency” and contains useful rules regarding publication of laws and regulations, administrative proceedings, provision of information, and review and appeal. But a number of these rules raise questions as to whether the United States is in compliance.  If the United States is not in compliance, that may be a barrier to US approval and implementation of the Agreement.

Article 21.1.2 provides that each Party “to the extent possible” shall publish in advance the measures that it proposes to adopt respecting any matter covered by the KORUS.  Parties are also required to provide interested persons a reasonable opportunity to comment on such proposed measures.  My reading of this provision is that it applies to laws as well as regulations.  If so, one wonders whether the US is in compliance with this provision, particularly with regard to the Congress.  The Congress routinely adopts bills without giving interested person in the American or Korean public an opportunity to comment on such proposed measures.

Article 21.5 is titled “Policy on Private Purchases.”  It states: “Recognizing the benefits of liberalized and expanded bilateral trade and investment, each Party affirms that it is not its policy to discourage private persons in its territory from purchasing or using goods or services of the other Party through formal or informal means of influence or persuasion.”

 
This is an unusual provision.  As far as I know, it does not typically appear in US FTAs.

What does it mean?  As I read it, the United States is saying that it does not discourage its own nationals from purchasing goods or services of Korea; relatedly, Korea is making the same statement to the United States.  At the time this provision was finalized, June 2007, it may have been the case that both countries could affirm that such formal or informal boycotts were not official policy.  But can the United States continue to affirm that today?

On April 30, President Obama delivered a major address on the Auto Industry at the White House where he outlined the Administration’s new policies.  Seehttp://www.whitehouse.gov/the_press_office/Remarks-by-the-President-on-the-Auto-Industry/.  Toward the end of his speech, Obama said: “So these are some of the steps that we're taking to make it easier for Americans to buy a car. If you are considering buying a car, I hope it will be an American car.”  In that statement, the President expressed his hope to the American public that if anyone is considering buying an automobile, that he hopes it will be “an American car.” 

Given the affirmation in Article 21.5 of the KORUS, one can legitimately ask whether that treaty affirmative is still operative today.  If it has become untrue, then this provision would need to be renegotiated before the KORUS could be sent to the US Congress.  Clearly, President Obama is encouragingprivate persons in its territory from purchasing goods of the other party (Korea).  He is doing so through formal means of influence and persuasion. The legal questions then becomes whether encouraging domestic persons to buy American cars is the equivalent of discouraging them from buying Korean (or Japanese cars).  In my view, given the limited number of countries that produce cars for the American market,  urging consumers to buy American is the same thing as urging consumers not to buy Korean.  If so, then anti-boycott provision would need to be removed from the KORUS because the United Statesno longer has the prescribed policy. 

In summary, in today’s blog entry, I have identified two provisions of the Transparency Chapter of KORUS that the United States may not be in compliance with.  These provisions presents yet another barrier to USlegislative approval of the KORUS.

 
In discussing the KORUS let me also offer an observation about the inadequacy of the USTR website.  For KORUS, and for all existing and pending US free trade agreements, the USTR website does not provide a full text of the agreement in one document that can be downloaded in a word processing program.  Instead, the KORUS is listed only article by article which makes it much harder for stakeholders to study the agreement.  (See http://www.ustr.gov/trade-agreements/free-trade-agreements/korus-fta/final-text.)  Moreover the format on the USTR is a non-copyable PDF format.  So in writing this blog entry, there was no way I knew of to copy the language of the KORUS into a Microsoft  Word document.  Instead, I had to retype.  In my view, the unwillingness of USTR to provide full text downloadable documents on its website of US legal texts is unacceptable.