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Korea free trade talks with US

Korea Herald (Seoul)

3 February 2005

[EDITORIAL] Free trade talks with U.S.

Korea and the United States start working-level talks today to explore the feasibility of a free trade agreement between the two countries. We welcome the meeting. If the talks go smoothly, a joint study on a free trade deal involving experts from the business, government and academia of the two countries will be conducted before formal negotiations start.

Currently, Korea is engaged in negotiations or joint study on FTAs with some 20 countries, a sharp contrast with a year ago when it was promoting a free trade deal with just one country - Chile. Yet following the implementation of the trade pact with the South American country last April, Korea buckled down to bilateral talks with its trading partners.

The countries with which Korea is now holding trade negotiations include Japan, Singapore and the European Free Trade Association. Next month, Korea will start talks with other members of the Association of Southeast Asian Nations. In addition to these countries, Korea is engaged in joint study with Mexico and India.

While these countries are all important trading partners for Korea, the United States can be said to be more important not just because of the large trading volume between the two nations but because of Korea`s close diplomatic and security ties with the world`s sole superpower. Hence, Korea needs to give priority to forging a free trade pact with its most important ally.

Korea`s trade with the United States reached $70 billion last year, or 15 percent of Korea`s overall trade. A bilateral trade pact would further increase the trading volume. Furthermore, it will have the effect of cementing the Korea-U.S. alliance, which is undergoing a fundamental change amid the U.S. move to adapt its military to new security challenges such as terrorism.

A bilateral pact with Korea would also benefit U.S. firms. The National Association of Manufacturers of America, the largest U.S. manufacturers` group with 14,000 member companies, has reportedly picked Korea as one of the five key potential FTA partners and will recommend that the Bush administration and U.S. lawmakers seek a trade accord with Korea.

But there exist hurdles to a free trade accord between the two countries. On the U.S. side, one such obstacle may be Korea`s screen quota system which limits the number of days local movie theaters can show foreign films. Korea has been reluctant to change the system, causing a major stumbling block in the talks on a bilateral investment treaty between the countries.

We advise the government to take a more flexible stance on the screen quota so that the investment treaty can be concluded without further delay, paving the way to an FTA with the United States. The U.S. side, in return, needs to be more forthcoming on the mutual visa waiver program which has long been requested by Seoul. We hope the government will accelerate the talks with the United States in line with President Roh Moo-hyun`s call for a more positive and proactive open-door policy.

 source: Korea Herald