By Don Southerton, KoreaLegal.org Editor
Mid summer and the anticipated early July target for signing the KORUS FTA has come and gone. That said, it’s time for an update on both South Korea’s Assembly and the US Congress’ review of the treaty.
South Korea Update: Senior lawmakers of the ruling party reiterated Monday that they would push for the ratification of the Korea-U.S. free trade agreement (KORUS FTA) during the August session of the National Assembly.
“We are aiming to pass the FTA bill by the end of next month,” Rep. Hwang Woo-yeo, floor leader of the Grand National Party (GNP), said.
The four-term lawmaker dispelled growing concerns that the conservative party may use its majority status to ram through the contentious bill without proper deliberations with the opposition.
The GNP, which controls 169 seats in the 299-member unicameral legislature, has unilaterally endorsed a number of major bills after physical clashes with rival parties, including budget proposals and an FTA with the European Union.
When asked what his party would do if opposition parties forcibly block the passage of the trade pact, Hwang replied that his party will likely stick with the democratic process while it also remains pending in the U.S. Congress.
“So long as Washington does not ram the trade deal through the Congress, the GNP will handle the matter through dialogue and negotiations with opposition parties,” he said.
GNP spokeswoman Rep. Bae Eun-hee also noted that the GNP reaffirmed its position that it will push for the passage of the KORUS FTA at a joint workshop of the party’s Supreme Council and policy committee on Sunday.
Last Wednesday, Hwang and the GNP’s new Chairman Hong Joon-pyo expressed their support for a prompt ratification of the much-delayed trade deal at a meeting with presidential chief of staff Yim Tae-hee.
The FTA was signed in 2007, but the government’s move to get the bill ratified has been blocked partly because of strong objections from the main opposition Democratic Party (DP) and the country’s farming industry.
However, Chairman Hong, who is known as a strong advocator of the FTA, hinted that the GNP may have to risk a physical showdown with rival parties, suggesting a division within the ruling block.
Hong reportedly said the GNP has no reason to hesitate in using its majority status to approve the bill as recent polls show some 65 percent of the public support the deal.
Business experts forecast that once implemented, the KORUS FTA may increase the country’s gross domestic product (GDP) by 6 percent over the next decade.
They claim that the bilateral deal could create as many as 34,000 jobs a year.
The fate of the deal, however, remains uncertain as the DP insists on renegotiations with Washington.
Meanwhile, the GNP has announced that it will push the passage of a bill that calls for stricter aid distribution monitoring in North Korea and financial aid to non-governmental organizations that keep records of human rights abuses in the communist country.
Source: Korea Times
U.S. Update: President Barack Obama will soon send a free trade pact with South Korea to Congress for approval despite Republican threats to vote against it because of a retraining program for workers displaced by trade, White House Chief of Staff Bill Daley said on Thursday.
“There is no time to waste fighting politics as usual,” Daley said in a speech at the U.S. Chamber of Commerce to the U.S.-Korea Business Council. “If we do not act before the August recess, American business will suffer.”
Obama faces a showdown with Republicans over his insistence that an extension of the nearly 50-year-old Trade Adjustment Assistance (TAA) retraining program be passed along with the Korea pact and two other pending free trade agreements with Colombia and Panama.
Republicans have objected to Obama’s plan to insert the TAA program into the implementing bill for the South Korea agreement, insisting that lawmakers be allowed to vote separately on the TAA and the trade pact.
The White House believes both could pass separately.
However, Daley said Republicans have yet to offer a “credible” plan that would prevent TAA opponents from blocking a vote on the program, which Democrats see as a vital safety net and many Republicans view as ineffective.
“We can no longer wait. If there’s no agreement on an alternative approach in the very near future, we will move forward to seek passage of the FTA (Free Trade Agreement) with TAA” included, Daley told the audience of U.S. and Korean business officials.
Daley said the White House expects the Korea agreement “to create or support 70,000 American jobs” through tariff cuts that will open the South Korean market to more U.S. exports.
Congress must act soon because a rival deal struck by the European Union with South Korea went into force on July 1, threatening U.S. market share in the longtime ally, he said.
Senate Republican Leader Mitch McConnell has said he would vote against the Korean agreement if TAA is included in the implementing legislation for the deal.
AMERICAN JOBS ON THE LINE
But most business leaders recognize an extension of TAA has to be part of the mix, and don’t believe it is worth holding the agreement up over the issue.
“We can’t let differences over processes and procedures hold back these agreements any longer. American jobs and American standing in the world are on the line,” said U.S. Chamber of Commerce President Thomas Donohue.
The deal was originally negotiated during the administration of former President George W. Bush and business groups have been waiting four years for it to become law.
“We’ve seen first hand what these free trade agreements do after implementation,” said Mike Ducker, chief operating officer of FedEx Express, a division of FedEx.
“Not only does it create new commercial opportunities for our customers and greater demand for our services, it allows us to continue growing our operations and our work force around the world,” Ducker told Reuters in an interview.
Critics, including the AFL-CIO labor federation and Public Citizen’s Global Trade Watch, say tradedeals endanger U.S. jobs by cutting U.S. tariffs and encouraging companies to move their operations overseas.
A study by the left-leaning Economic Policy Institute says the Korean trade agreement could displace about 159,000 American jobs over seven years.
But Harrison Cook, vice president of international government affairs for Eli Lilly and Company, said the rival EU-South Korea agreement puts U.S. pharmaceutical companies at a disadvantage in a major market.
“All those tariff preferences are going to go to our Europeans competitors, not to us. That’s a significant consideration in this sector, where you do long-term contracting,” Cook told Reuters in an interview.
Source: Reuters
Samsung Fights Back
Friday, July 1st, 2011By Don Southerton, KoreaLegal.org Editor
In my previous post, I shared how Apple continued to go after Samsung–taking the battle to the courts in Korea. Samsung has countered and file a complaint with the International Trade Commission. My opinion is that much of this is but legal maneuvering designed to position each party best for a settlement. Neither could really expect bans on sale of their rival’s products.
I’d advise Apple’s lawyers to learn more about Samsung and their negotiation style and tactics… Apple leadership would benefit, too. I can help with this.
SEOUL—Samsung Electronics Co.’s countersuits against Apple Inc.’s allegations of product copying have expanded to six countries, the company said Thursday, and now include a complaint with the International Trade Commission seeking to stop the sale of popular Apple products in the U.S.
The suits appear part of a broad strategy by Samsung to fight Apple’s lawsuit over the design of its smartphones and tablet computers with a barrage of litigation around the world.
By doing so, Samsung would build leverage that might force Apple to settle the initial case—which threatens to damage Samsung’s efforts to catch up to Apple in the smartphone and tablet markets, where profit margins are relatively high and market leadership is unsettled.
Samsung declined to answer questions about the strategy. A spokesman said the company doesn’t comment on pending legal matters. Apple declined to comment.
But the scope and ongoing expansion of the countersuits show the importance Samsung, the world’s largest technology manufacturer by revenue, has placed on countering Apple’s accusations that it copied Apple’s designs.
Apple is moving toward seeking a preliminary injunction in the initial case—filed in April in a federal court in San Jose, Calif.—that might limit Samsung’s ability to sell its smartphones and tablet PCs in the U.S., its biggest market.
With the latest filings earlier this week in Delaware and the Washington-based ITC, Samsung now has countersuits pending in California, South Korea, Japan, Germany, Italy and the United Kingdom.
“To have lawsuits in many countries at the start, it’s the best way to protect their patents,” Jong Sang-jo, a law professor at Seoul National University, said of Samsung’s tactics.
Apple filed a follow-up suit against Samsung in South Korea last week. It alleged some of the same product-copying violations as in the U.S. case and accused Samsung of violating some of Apple’s technical patents.
The fight is one of many that have been filed over the past year over smartphone and tablet technology. But this one has gained greater attention because Apple and Samsung, while competing in consumer products, have a customer-supplier relationship in which Apple is the biggest buyer of Samsung’s device components, including chips and screens.
That has prompted speculation throughout the electronics industry that Apple might try to end its supplier relationship with Samsung. Such a move would prove costly to Samsung’s chip business, which has yielded the company’s highest profits for the past two years. It would also prove a challenge to Apple to find other suppliers that can provide parts at the volume and price that Samsung can.
Apple executives have said they expect the relationship to continue. A spokesman said Thursday that Samsung said it would fulfill its long-term contracts with Apple, adding: “We view the patent issue as entirely separate from our business relationship with Apple.”
Samsung chairman Lee Kun-hee in late April indirectly criticized Apple’s lawsuit as an attempt to restrain Samsung. “When a nail sticks out, [people] try to pound it down,” Mr. Lee told local reporters at the time.
Since Apple filed the first suit in late April, the legal approaches of the two companies have laid bare their different basic competencies and advantages in the marketplace.
Apple is asserting the primacy of its ability to design distinctive products, a skill that gives it the ability to charge premium prices and reap larger profit margins. By focusing on technology patents rather than design, Samsung is asserting that the development of components, related technologies and manufacturing prowess should be just as, or more, valuable.
In the market, Apple’s strategy has proved more profitable. It has been able to boost both its profit margins and its sales in recent years. Samsung, meanwhile, has had to contend with declining profit margins even as sales rose in its businesses.
For example, Samsung achieved a record profit last year, beating its previous record set in 2004, but it did so with smaller overall margins and a larger base of revenue, approximately twice the sales level it had in 2004.
Source: WSJ
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