S Korea, US finish latest trade talks amid no progress in key areas
9 December 2006
S. Korea, U.S. finish latest trade talks amid no progress in key areas
By Kim Deok-hyun
BIG SKY RESORT, Montana, Dec. 8 (Yonhap) — South Korea and the U.S. made some progress in their latest round of free trade talks that ended Friday but failed to resolve differences in most sensitive areas such as antidumping laws, autos and pharmaceuticals, both sides said.
The two sides met for five days in Montana for a fifth round of talks since June, hoping to seal a deal by the end of March at the latest. The top U.S. negotiator, Wendy Cutler, described it as a "complex and challenging back-and-forth" phase of negotiations, Cutler expressed strong disappointment at the lack of progress in automobiles and pharmaceuticals, the two areas that are of particular U.S. concerns.
"Failure to make progress in the two areas is extremely disappointing for our government," the Assistant U.S. Trade Representative said at a news conference. "I remain determined to press forward with these issues."
Her South Korean counterpart, Ambassador Kim Jong-hoon, said he was also disappointed at the lack of progress on the issue of antidumping measures, an issue Seoul wants to tackle with prioritry. Korean officials think that their exports have often been unfairly punished by U.S. anti-dumping rules.
"If there is no progress in trade remedies, there will be no progress in autos and pharmaceuticals," Kim told reporters. "We will closely monitor the U.S. process of review on our proposals and continue to persuade our counterparts to make progress in the sector of trade remedies by the end of this year."
Earlier, Cutler said the U.S. will look closely at the Korean proposal on antidumping rules when she returns to Washington. South Korea wants the U.S. to change or ease its anti-dumping rules for imports from South Korea.
Despite the snags in some areas, both sides reported "good progress" in a number of less sensitive areas, including industrial market access, services, intellectual property rights and competition.
For instance, the U.S. agreed to eliminate tariffs on more than 300 items, including cameras and pianos, worth US$700 million a year. In return, South Korea agreed to improve tariff cuts for over 200 items, including plastic products and audio speakers worth $400 million a year.
"Clearly, we did make good progress this week," Cutler said, adding that she remained confident that a deal could be signed by the unofficial target of end-March.
On Wednesday, South Korean officials raised the ante by walking out of two committees handling anti-dumping measures and pharmaceuticals after their demand for changing or easing U.S. anti-dumping rules was turned down.
Even after the official negotiations end, the two sides will continue to try to resolve differences through informal contacts, Cutler said.
South Korean Trade Minister Kim Hyun-jong was in Washington this week meeting U.S. lawmakers to try to persuade them to understand the need to change or ease U.S. antidumping laws under the proposed FTA, both sides said.
U.S. Commerce Secretary Carlos Gutierrez will travel to Seoul next week to express the importance of the proposed free trade agreement, Cutler said.
"In any negotiation, there are certain sensitive and difficult issues that make very little traction until the negotiations near a close," said Troy Stangarone, a trade analyst at the Washington-based Korea Economic Institute, in an e-mail interview.
"Much like rice for Korea, trade remedies is a highly sensitive area for the United States, so the talks coming to a standstill in this area is not a surprise," the analyst said.
The analyst said the key to concluding the negotiations will be for both sides to make significant progress in less sensitive areas.
The march deadline is important because U.S. President George W. Bush’s "fast-track" authority expires on June 30. A 90-day review of a deal is needed for Congress to vote on it without amendments.
"As the TPA deadline approaches, both sides will be able to focus on reaching a mutually satisfactory agreement on the few remaining sensitive areas," Stangarone said, referring to Bush’s trade promotion authority.
The two sides said they didn’t discuss about rice, one of the most sensitive items. On Thursday, Cutler told Yonhap News Agency that she will discuss about rice "at some point."
Cutler again emphasized her government’s desire to fully open South Korea’s beef market, saying the U.S. Congress may not approve a trade pact with South Korea "no matter how good it is."
South Korea has rejected three shipments of U.S. beef after bone fragments were found in violation of a bilateral agreement that allowed imports to resume. Though the beef quarantine issue is not technically related to free trade talks, U.S. officials have raised pressure for South Korea to ease the quarantine regulations.
Cutler said the U.S. plans to hold "consultations" with South Korea over the beef issue.
A sixth round of talks will be held in the week of Jan. 15 in South Korea and both sides hinted that a seventh round may be necessary.
South Korea is Washington’s seventh-largest market, with two-way trade totaling $72 billion last year. The U.S. is South Korea’s second-largest export market, taking 17 percent of its total shipments.
Meanwhile, about 20 South Korean farmers and activists also held peaceful demonstrations during the weeklong talks in this snow-covered ski resort.
"FTA talks should be scrapped because it will devastate our agriculture industry," said Jun Sung-do, a representative of the Korean Peasants League.
Farmers in South Korea strongly oppose the proposed trade deal with the U.S., saying if an agreement is adopted, it would destroy their livelihoods, hit by a flood of cheaper American farm goods.
