Free Trade Deal With Korea Bad For Ford?

President Bush signed another deal that mainstream America may just now become aware of. The deal is called Republic of Korea-United States Free Trade Agreement (KORUS FTA). The treaty was concluded in April and signed in June of 2007. Another fast-track deal of course.

But the deal has never been fully approved of yet by the U.S. Congress. The full court press is on. South Korean officials are wanting a deal, as other nations are willing to sign similar agreements. The other entities being Chile, the EU, and Australia. America’s beef and pork industry would stand to gain the most on this deal. And time is running out, according to the U.S. meat industry.

On the other side of the dispute is the South Korean farmer. Farmers are very unhappy with FTA. Protestors in South Korea have held nationwide rallies against FTA. This is serious business with them.

The big issue is with both Ford and UAW. Ford has a lucrative market in the United States, especially in the truck category. Ford trucks are extremely popular. There currently is a 25% tariff on pickup truck imports and U.S. automakers want to keep it that way (BusinessWeek).

Michigan lawmakers are crying foul. They have a good argument; they are trying to protect jobs in the auto industry.

“The Big Three U.S. automakers sold fewer than 7,000 automobiles in South Korea last year, while Hyundai alone has sold nearly 375,000 cars in the U.S. this year”, as posted on TheHill.com website. Now what would make Koreans buy any more vehicles that they already are? Is this going to change anything?

In 2005, only 5,795 American cars were sold in South Korea. Korean automakers sold 730,863 vehicles the same year.

In 2006, only 4,000 American cars were sold in South Korea. While in that same year, over 800,000 cars produced by Korean automakers were sold in the United States.

In 2007, the Hyundai plant in Alabama 775,000 Korean cars were sold in the U.S. Out of those, 250,000 were made at the Hyundai plant in Alabama. Hyundai Motor Manufacturing Alabama (HMMA) currently gives 2,700 jobs to Alabama residents.

Kia Motors Manufacturing Georgia, Inc. received over 44,000 job applications between Nov. 3, 2009 and May 7, 2010. That’s quite an impact in the state of Georgia.

From KIA Motors Manufacturing Georgia:  On March 13, 2006, Kia Motors America (KMA), Kia’s sales and marketing company in the U.S. , and the State of Georgia executed the Site Acquisition and Development Agreement, which announced plans to construct a $1 billion automotive assembly and manufacturing plant on 2,259 acres of land in West Point, Ga., the first plant for Kia in North America.

Will the KORUS-FTA bring more pain to the U.S. auto sector? Or could this bring more jobs to Alabama and Georgia? Is Japan looking over its shoulder at the South Korean auto industry?