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FTA talks with U.S. extended, with focus on auto imports

JoongAng Daily

FTA talks with U.S. extended, with focus on auto imports

3 December 2010

(Yonhap) Korea and the United States have extended their talks on a pending free trade deal by at least one more day in a last-minute effort to reach an agreement.

Sides on Wednesday could not narrow their differences over the tariffs on automobiles, Korean officials said.

Emerging from a late evening session with U.S. Trade Representative Ron Kirk at a hotel in Columbia, Maryland, Korean Trade Minister Kim Jong-hoon told reporters, “We still have a long road ahead.”

Autos and beef have served as the major hurdles to the ratification of the Korea FTA signed in 2007 under the Bush administration.

The focus, however, has been on autos as Korea has been adamant in its position not to discuss the possible shipments of beef from cattle older than 30 months.

The Lee Myung-bak administration was almost paralyzed in early 2008 due to weeks of street rallies after the Korean president’s decision to resume U.S. beef imports despite fears of mad cow disease.

The U.S. beef industry recognizes the sensitivity of the issue and does not want to jeopardize the rapid increase in beef exports since 2008.

“Beef was not discussed today, and we are not discussing that,” Kim said.

Talks have been focused on to what extent Seoul will ease safety and environmental standards and delay the elimination of the 2.5 percent tariff on most autos and auto parts, as well as a phaseout of the 25 percent tariff on light trucks.

The U.S. exported 5,878 automobiles to South Korea last year. South Korean auto shipments to the U.S. totaled 476,833 last year, according to United Auto Workers.

“Korean negotiators are continuing to resist U.S. demands for additional concessions in the auto sector, such as a longer phaseout for a U.S. car tariff, and are insisting that any major concessions they make would have to be offset with U.S. concessions on agriculture,” online magazine World Trade Online.

The first day’s talks focused on autos and did not discuss beef, Kim said Tuesday, adding the talks may be extended one or two more days, or the U.S. side may have to visit Korea later for additional discussions.

U.S. President Barack Obama said in Seoul early last month that auto trade poses a bigger obstacle than beef and pledged to complete the talks “within weeks, not months,” although he missed his earlier, self-imposed deadline of mid-November.

Obama has voiced his desire to present the deal to Congress early next year, as failure to do so would likely doom the FTA as Republicans vow to focus on domestic issues, including taxes.