NORTH AMERICAN REPORTS
Leverage, But in Which Direction?
Both projects come at the exact moment that the U.S. and South Korea are commencing free trade negotiations.
"This is the most commercially significant free trade negotiation we have embarked on in 15 years," said U.S. Trade Representative Rob Portman in February. "Korea is the world's 10th largest economy with an annual GDP rapidly approaching $1 trillion and our 7th largest export market."
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| U.S. Sen. Trent Lott (R-Miss.) |
U.S. Sen. Trent Lott (R-Miss.), for one, has some reservations about one company in particular, notwithstanding his state's runner-up finish for the Kia project. The firm picked the Peach State over the much larger financial incentives offered by Mississippi.
"I do have serious concerns about dealing with Hyundai/Kia," Sen. Lott said in a March voice message to Site Selection, left prior to news of the scandal and just as Georgia Gov. Sonny Perdue was readying himself for the flight to Seoul for the official signing ceremony. "I really don't think they understand U.S. culture, and I've become very uncomfortable with the reliability on their negotiations commitments, because they don't seem to hold. It's clearly going to affect my thinking on the free trade negotiations … because trade is about free and fair trade, and I'm concerned about the reliability of these companies."
Access to the Korean marketplace by U.S. car manufacturers has been a sticking point between the nations in the past.
"I fear that if the appropriate amount of caution is not taken, the agreement will significantly benefit Korean automakers without giving U.S. automakers any additional access to Korea's historically closed market," wrote U.S. Sen. George V. Voinovich (R-Ohio) and U.S. Sen. Carl Levin (D-Mich.), co-chairs of the Senate Auto Caucus, in a February letter to Portman, now President Bush's nominee to serve as his budget director. Indeed, one study indicates that Korean exports to the U.S. would increase by as much as 17 percent with an FTA, boosting Korea's GDP by 2 percent.
