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SKorea trade pact will bar imports from NKorea

The top U.S. diplomat for east Asia said Thursday a proposed free trade agreement with South Korea is in America's strategic interests, rejecting concerns it could provide a back door for imports from communist North Korea.

In a testy exchange with a lawmaker, Assistant Secretary of State Kurt Campbell defended the pact, which was completed by the U.S. and South Korean governments in December but still requires congressional approval.

Campbell told a House of Representatives Foreign Affairs subcommittee hearing on "Protecting American Interests in China and Asia" that it is long-standing U.S. policy to prohibit imports from North Korea, whose authoritarian regime has conducted nuclear and long-range missile tests in defiance of U.N. sanctions.

Rep. Brad Sherman, D-Calif., said that under the agreement, goods with up to 65 percent non-South Korean content can enter the United States with preferential, often duty-free, treatment. He said nothing in the agreement prevents that foreign content from being Chinese or North Korean — and South Korea from imposing countervailing duties if America should object.

"The text of the agreement is the text of the agreement," Sherman said. "You've got nothing in writing from the South Koreans that they will not point to the text of that agreement and raise tariffs on American chickens or whatever else they want to raise tariffs on when we bar those North Korean goods from coming in."

Some 40,000 North Koreans work at an industrial park on its side of the heavily militarized border that hosts companies from rival South Korea — a symbol of cooperation that has continued to operate despite current tense relations across the Korean Peninsula.

"We have very clear protections, and we have made very clear to South Korea that we will not import goods produced in North Korea," Campbell responded.

He said the agreement was in America's "best strategic interests."

The Obama administration says the pact would eliminate tariffs on 95 percent of U.S. consumer and industrial exports to South Korea, and boost U.S. exports by $11 billion and supporting 70,000 new jobs in America. It is a major plank of a strategy to leverage trade with the Asia-Pacific to help the U.S. recover from the global crisis.

The agreement's passage through Congress faces a further complicating factor. Republicans are pushing for trade agreements with Colombia and Panama, which the Democratic administration says require more time. Republicans say they will not act on the South Korea deal unless all three pacts are submitted as a package.

At Thursday's hearing, Rep. Don Manzullo, a Republican, said the administration needs to do a better job enforcing trade rules on China as abuses are severely hampering American companies' efforts to compete there.

He said the government's goal of doubling U.S. exports by 2014 will not be met if "the administration continues to allow China to flagrantly flout trade rules at the expense of American jobs."

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