In return, the US made some concessions in pork exports and patent protection of pharmaceutical products.

If it is ratified by the legislature of the two countries, the Agreement would become effective sometime during 2012. The chance for the passage of the ratification bill is brighter in the US congress than in the Korean National Assembly. In the US, both Democrats and Republicans, auto makers and unions are all applauding the deal. By contrast, Korea’s opposition parties are all in the same boat for opposing the deal, saying that Korea made unjustifiably too many concessions to the US. The opposition campaign is unlikely, though, to inflame another massive candlelight demonstration this time around and without pervasive public support, the minority opposition parties do not have enough votes to veto the ratification.

The agreement benefits Korea and the US significantly. Korea benefits a great deal by being able to secure access to the world’s largest market in preferential terms earlier than its competitors like Japan and the EU. The US avoids lagging in the Korean market after the EU, which has already concluded FTA negotiations with KOREA. For the US, the FTA with Korea is the most significant preferential trade arrangement since NAFTA in 1994. It will create a considerable number of jobs in the US, which is currently suffering through near 10 per cent unemployment.

Furthermore, the KORUS FTA is expected to improve the negative perception of the Obama government, previously believed to be lukewarm about promoting free trade. For Korea, strengthening economic ties with the US solidifies its long-standing alliance with the US. This is especially important for deterring another military provocation with North Korea after its brutal shelling of Yeonpyeong Island, which killed two marines and two civilians.

Regional perspectives are important when interpreting the KORUS FTA. Mr. Obama is re-engaging Asia economically and militarily; the FTA with Korea sets up a beachhead for the US to make inroads into the booming Asian market and is a safeguard for the US against being excluded or marginalised in the slow but steady process towards economic integration in East Asia.

Among Korea’s major trading partners, China and Japan are high on the list of the next FTA negotiation. Being situated geographically between China and US, Korea is destined to keep balance between the two. China is Korea’s number one trading partner, while the US is indispensable for maintaining peace in the Korean peninsula. Having obtained an FTA with the US, Korea might feel more comfortable commencing FTA negotiations with China. Needless to say, an FTA with China poses more challenges to Korea compared with its FTA with the US. In particular, the dominance of Chinese agricultural products is the biggest obstacle to a Korea-China FTA.

There are complex and intricate dynamics in the Asia-Pacific region and its sub-regions affecting the initiative of FTAs. The third trilateral joint study meeting for Korea-China-Japan FTA was held in December this year. The final outcome from the study is to be reported to the Leaders in 2012. Every year when the leaders of the ASEAN plus three countries meet, the agenda for East Asian economic integration is on the table. At the APEC meeting in Yokohama last November, Japan showed greater interest in participating in TPP, which is known to be a favoured agreement for US trade policy.

Nobody can tell with confidence whether these complex dynamics will converge towards freer trade regionally and globally, or diverge to make each initiative push one another to a blind alley. Nonetheless, it is expected that the Korea-US FTA will open more opportunities for Korea to play a constructive role in facilitating economic integration in East Asia and beyond.

Kyung-Tae Lee is President, Institute for International Trade,  Korea International Trade Association (KITA).