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Korea, China not ready for free trade pact: trade official

The Hankyoreh, Seoul

Korea, China not ready for free trade pact: trade official

Deal with neighbor to west a sensitive issue

10 August 2006

A South Korean trade official, who participated in the recent free trade negotiations with Washington, said that Seoul was not in a position to play the "China card" in its negotiations with the United States for fear of causing unnecessary backlash from Washington, referring to the negotiation leverage that might be gained by first signing a free trade pact with China.

Asked to explain why Seoul decided to seek an FTA with the U.S. instead of China, the official said on condition of anonymity, "Among the economic giants, there was no alternative other than the U.S. to pursue such a bilateral trade pact with." The official said that it would be impossible to sign a free trade agreement (FTA) with China unless the two sides find common ground on lowering tariffs in the agriculture sector.

He made the remarks in response to criticism that Seoul made too many compromises to jump-start free trade negotiations with the world’s largest economy.

Q. From what time has China shown a keen interest in an FTA with South Korea?

A. China has been aggressive in making a deal with South Korea since May and June this year, when trade ministers from the two nations had meetings.

Q. Why didn’t South Korea accept China’s proposal for FTA talks?

A. South Korean produce cannot compete with Chinese agricultural products [in terms of price]. We had more than 200 items on the list of sensitive products. How can we solve the problem? We will not be able to stand the outcry from local farmers.

Q. China reportedly showed a flexible stance on the agriculture issue.

A. Regardless of flexibility, it would be almost impossible to deal with 200 sensitive items.

Q. Did the government ask opinions from the U.S. government and Congress?

A. It is not an easy issue. So we asked an academic figure like Robert Gallucci first. We could risk causing the bad impression that we are trying to play the "China card."

Q. Why not pursue an FTA with China first, rather than one with the U.S.?

A. At this moment, it is impossible to seek a pact with China. An FTA with the U.S. is not something that can be replaced by one with China. Currently, the U.S. is the only option for us among economic giants.

Q. FTA talks with Washington have gained momentum since September last year.

A. From the second half of last year, we have made efforts to persuade the U.S. [into talks]. In the process, both sides got to have bilateral trust. Not until November, when the Asia Pacific Economic Cooperation [APEC] forum was held did we receive an answer from Washington.