By Ronan Glon
Saturday, Mar 31st, 2012 @ 4:16 pm
 
The free trade agreement that was signed between the United States and South Korea two weeks ago has left many on both sides skeptical about how well it will work.

In the United States, Fiat-Chrysler CEO Sergio Marchionne told congress that he doesn't expect the agreement to change a whole lot for Chrysler. He also issued a warning to lawmakers, saying that it takes considerably more than a signed piece of paper to make a market fair.

"We have to make sure that when we sign these damn things, we can enforce them in terms of it being truly free," said Marchionne. "When [companies] tell you that maybe some of these things are really not very good, there's a reason for this. It's not because I'm into protectionist measures."

Marchionne has typically been against such agreements, and he speaks from experience. The European Union and South Korea have already implemented a similar free trade agreement, and statistics show that it has done more to help South Korean manufacturers than European manufacturers.

According to Marchionne, in 2011 South Korean auto exports to Europe rose by 45% to 150,000 cars. That same year, European auto exports to South Korea only amounted to a scant 15,000 cars.

Marchionne fears that lowering the tariffs between the United States and South Korea will create a similar situation in the United States, which will consequently put recovering Chrysler in a bad spot.

Only time will tell what effect the agreement will have on the American auto industry, but Marchionne's battle is far from won. In 2010, American car companies exported just 7,500 cars to South Korea; that same year, South Korean companies shipped over 562,000 cars to the United States.