S Korea retracts key demand on anti-dumping rules: leaked gov’t report
2007/01/18
S. Korea retracts key demand on anti-dumping rules: leaked gov’t report
By Kim Deok-hyun
SEOUL, Jan. 18 (Yonhap) — South Korea has virtually retracted its demand for the United States to change its anti-dumping laws, clearing a major obstacle to a proposed free trade agreement between the two countries, South Korean media reported Thursday.
Citing a classified government report, the liberal newspaper Hankyoreh and Pressian, an Internet newspaper, reported that the Seoul government has concluded that it’s impossible to win U.S. concessions on the issue of anti-dumping rules.
South Korea thus may have to soften its stance on the issue of anti-dumping remedies and instead ask the U.S. to favorably consider its demand without changing laws, the media outlets quoted the government report to the National Assembly as saying.
A copy of the Jan. 13 report, as seen by Yonhap News Agency, suggests that South Korea would use its softened "card" to gain concessions in other contentious areas.
"Even if our interests are not reflected in the issue of trade remedies, we need to push the U.S. side to use the card in other negotiations," it says.
Kim Jong-hoon, the chief South Korean negotiator, acknowledged the existence of such a government report and expressed disappointment that it was leaked to the press.
"It is regretful that the report was leaked. That should not have happened," Kim said at a luncheon meeting with journalists, according to a pool report.
However, Kim reiterated that he will keep pushing the U.S. to change its trade remedy laws, saying he has his own strategy to resolve the issue.
Kim confirmed that a new round of talks, the seventh since last June, will be held in February in the U.S. but said he does not expect the negotiations to be wrapped up by that time.
"That won’t happen during the seventh round, but we don’t discuss an eighth round yet," Kim said.
Changing U.S. anti-dumping rules was the single most important South Korean demand in the bilateral free trade talks. South Korean officials believe Washington has often unfairly used its anti-dumping laws to curb semiconductors and other high-tech South Korean shipments.
If the U.S. makes concessions on the issue of anti-dumping remedies, Seoul offered to address key U.S. interests in expanding its vehicle and pharmaceutical sales in South Korea.
Apparently buoyed by the softened South Korean stance, Wendy Cutler, the chief U.S. negotiator, said in an Interview with Yonhap on Wednesday that she was still optimistic about the proposed deal, although some key issues remain unresolved and time was running short.
"My mood is upbeat, and I feel we can do this," Cutler said, citing progress made at informal backroom negotiations between her and her South Korean counterpart, Kim Jong-hoon.
Cutler said she already had told Kim that it was impossible for the U.S. to change its laws to address the South Korean demand on anti-dumping rules.
While "less sensitive" issues such as a tariff phase-out on industrial goods, competition and investment were handled by low-level officials, the two top negotiators took on the burden of tackling what many believed were the three most contentious issues — anti-dumping remedies, automobiles and drugs.
Ending the fourth day of the sixth round of talks on Thursday, Lee Hye-min, Seoul’s deputy chief negotiator, said progress has been made on a tariff phase-out in industrial goods.
"So far today, I can say we have nearly completed framing an agreement in the sector of industrial goods," Lee said. "Progress has been made at this round."
South Korea and the U.S. have agreed to remove tariffs over the next 10 years on about 99 percent of 15,494 items that will be covered by the proposed free trade accord, Lee said.
Among the industrial items that both sides agreed to cut tariffs on within five years, liquid crystal display panels, computer monitors and digital televisions are of particular interest to South Korea, Lee said.
In the sector of industrial goods, tax cuts on South Korean exports of auto and auto parts are among the areas that both sides can’t agree, Lee said. Both sides also agreed to cut tariffs immediately on fine chemical fuel and aircraft, he said.
On Thursday, textiles were also one of the tricky issues that were handled at the committee level. Of a total of 14 committees, 11 were convened to tackle less sensitive issues, officials said.
South Korea wants the U.S. to ease the "yarn-forward" rule of origin, which only allows textile products with domestically produced yarn to be sold in the U.S. market duty-free. Most South Korean textile products use cheap Chinese yarn.
Given the importance of the textile trade with the U.S., South Korea discussed the issue separately from the main talks in Seoul. These textile talks involved deputy Cabinet-level officials from South Korea and their U.S. counterparts.
The seventh round of the free trade talks is tentatively scheduled for February. Both sides plan to cut the size of their delegations for the next round by nearly half, indicating that most of the less sensitive issues can be successfully tackled in Seoul.
"During the seventh round, there will likely to be no working-level meetings in less sensitive areas," a senior South Korean trade official said on condition of anonymity. "Instead, negotiations will focus on core issues such as trade remedies and automobiles."
Time is running short for a deal to be reached before U.S. President George W. Bush’s "fast-track" trade promotion authority expires on July 1.
Under the authority, U.S. negotiators have until April 2 to submit a deal for an official 90-day review by Congress for an outright up-or-down vote without amendments.
The deal also requires ratification by South Korea’s National Assembly.
