Nothing can be guaranteed in a market but a level playing competition. The [agreement] contains everything the U.S. asked for during the negotiations; immediate elimination of Korea's current 8% tariff on autos, flatten the consumption tax to 5% within three years [no differentiation by engine size]. . . . and lenient exceptions for U.S.-made cars in environmental and safety standards. The [U.S. International Trade Commission] report estimated that the agreement would provide a good base to substantially improve U.S. auto companies' access to the Korean market.Frankly, I am actually very uncomfortable with what Seoul has done in order to appease Washington on this issue. The elimination of tariffs is done in the spirit of free-trade agreements, but the consumption tax was no "non-tariff barrier," as it applied to both foreign and domestic cars and was aimed at getting more fuel-efficient vehicles on the road. This is being scrapped now in order to hand-hold Detroit as they try to peddle their gas guzzlers.
Both Korean and American automakers sell cars by exporting and by producing at local subsidiaries. The number of cars sold in such manner in 2008 is: Korea sold in the U.S. 636,960 cars, while the U.S. sold in Korea 109,940 cars. Considering the size of the U.S. auto market, which is 14 times larger than that of Korea, a less than 7 to 1 ratio should not be regarded as unfair.The "lie" that Obama repeated several times on the campaign trail (and which Senator Chris Dodd parroted) is that in the ROK-US FTA, "all we can do is sell 5,000 automobiles in South Korea; they get to sell 600,000 of their automobiles in the United States."