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S Korea regrets US lawmakers’ call to widen auto market

Yonhap | Monday March 5, 2007

S. Korea Regrets Us Lawmakers’ Call To Widen Auto Market

SEOUL, March 5 Asia Pulse — South Korean officials expressed "regret" Sunday over U.S. lawmakers’ demands that South Korea further open its auto market as part of a proposed free trade agreement (FTA) with the world’s largest economy.

On March 2, 15 members of the U.S. Congress sent a letter to President George W. Bush demanding that South Korea’s 8 per cent tariff on imported autos must drop to zero immediately, in exchange for the phased elimination of the 2.5 per cent U.S. tariff on South Korean vehicles.

"We regret the letter, which could negatively affect the FTA talks that are now entering into an important phase," South Korea’s Foreign Affairs and Trade Ministry said.

"The letter reflects voices raised by some parts of the U.S. political community... but it could serve as a ’deal breaker’ in the FTA talks," the ministry said.

Asian automakers, such as Japan’s Toyota Motor Corp. and South Korea’s Hyundai Motor Co. (KSE:005380), have been eroding the U.S. market share of American automakers such as General Motors Corp. and Ford Motor Co.

In a related move, a group of South Korean lawmakers and civic group leaders on Sunday called for a halt to the FTA talks, claiming the negotiations would only lead to a makeshift or unfair agreement.

"It is well-anticipated that the (Seoul) government will push the country into signing an unfair agreement through a so-called "big deal" between ranking officials, therefore we propose holding an emergency meeting to discuss the current state of affairs," the group, consisting of 37 legislators and civic activists, said in a press release.

They said the meeting will be held Thursday at the Korea Press Center in downtown Seoul, where "500 to 600 people from all walks of life, including academic, religious and political circles" are expected to take part.

Korea and the U.S. both reported "significant progress" in the last round of talks, but also acknowledged that "gaps" remain between the two sides in key issues, such as U.S. anti-dumping laws and Korean auto and pharmaceutical markets.

U.S. and South Korean negotiators are racing against the clock to sign an FTA by the end of this month to take advantage of President George W. Bush’s "fast-track" trade promotion authority, which expires on July 1.

Under the authority, a deal may be approved by a simple yea-or-nay vote without amendments after a 90-day congressional review.

Beginning Thursday this week, negotiators from the two countries will hold their eighth round of FTA talks, scheduled over five days, in Seoul.

Seoul’s trade officials hinted that a ninth round of talks may be scheduled later in March in order to reach a deal.

 source: Asia Pulse