Monday, January 30, 2006

KAFTA: The Next Big Free Trade Agreement

The Washington Post reports that the U.S. and South Korea will likely announce the opening of talks to sign a comprehensive free trade agreement. For the U.S, such an agreement would represent the most economically significant free trade agreement since the implementation of NAFTA in 1994.

As Roger has noted, the U.S. free trade strategy under President Bush has been to negotiate bilateral free-trade agreements with the most important U.S. trading partners (Singapore, Australia, Chile, Central America, etc). From a free trade perspective, this is better than nothing, but many trade scholars prefer worldwide free trade schemes to these regional or bilateral pacts.

One interesting question for the U.S. and South Korea is whether the two parties will include a dispute resolution system as aggressive and comprehensive as NAFTA (so aggressive that it has sparked this lawsuit challenging its constitutionality). That seems unlikely, largely because it seems unnecessary, but something to keep an eye on.


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