S Korea, US head for high-level FTA talks to overcome remaining obstacles
2007/03/12
S. Korea, U.S. head for high-level FTA talks to overcome remaining obstacles
By Kim Deok-hyun
SEOUL, March 12 (Yonhap) — South Korea and the United States were to wrap up their final official round of free trade agreement talks in Seoul on Monday, although they still have a few sensitive issues hanging in the balance.
However, officials from both sides are confident that they can strike a deal before an end-of-March deadline after resolving those outstanding issues through informal talks which will involve a small number of top-level officials in the coming weeks.
"Breakdown of the talks is not in our cards," Kim Jong-hoon, the chief South Korean negotiator, told reporters on Sunday. "We can make a deal by the designated timeframe."
Both sides are under intense time pressure because U.S. negotiators have until April 2 to submit a deal for a mandatory 90-day congressional review to take advantage of U.S. President George W. Bush’s "fast-track" trade promotion authority, which expires on July 1.
The authority requires U.S. lawmakers to vote on a free trade deal without amendments. The deal, if made, also requires approval by South Korea’s National Assembly, where supporters outnumber opponents.
South Korean officials predicted that unresolved issues after this round would include automobiles, textiles, pharmaceuticals, anti-dumping remedies and some farm goods.
Those outstanding issues can be tackled through informal talks that would involve a small number of top-level officials, including the trade ministers and even the presidents of the two country, Kim said.
"There will be three-stage informal talks," Kim said, outlining plans by the two countries to tackle those outstanding issues in the run up to the March deadline.
Kim said he and his U.S. counterpart, Wendy Cutler, will meet in Washington in the week of March 19. If some issues still remain unresolved, South Korean Trade Minister Kim Hyun-chong and U.S. Trade Representative Susan Schwab then will meet in Seoul.
"The next stage is for the presidents of the two countries to intervene but for now, I’m not sure that that will happen," Kim said.
An ongoing trade row over U.S. beef imports into South Korea may also likely be a headache until the last moment, Kim said. U.S. officials warn that Congress would not endorse a deal with South Korea unless the beef spat is resolved.
Speedy headway was reported in less sensitive areas. By Sunday, full agreement was reached in three chapters — competition policy, government procurement and customs affairs — out of 19 chapters under review for the proposed FTA.
South Korean officials said agreement was imminent in as many as eight areas, including electronic commerce, government procurement, investment, labor environment and financial services.
Ending the final day’s morning session, Shin Je-yoon, Seoul’s lead negotiator on financial services, said both sides agreed to exclude South Korea’s state-run banks such as Korea Development Bank and Industrial Bank of Korea from the FTA, reiterating the chapter of financial services is close to agreement.
"In return, we agreed to allow U.S. banks in South Korea to transfer non-client business information back the U.S. two years after the FTA comes into effect," Shin said.
The stakes are high. South Korea and the U.S. did US$74 billion in two-way trade last year. Some studies show that an FTA would increase trade volume by 20 percent.
If successful, the deal would be the biggest for the U.S. since the North American Free Trade Agreement in 1994.
"In other U.S. FTA negotiations, it has been normal for negotiations to go down to the wire with a handful of sensitive, tough issues left to be dealt with at the ministerial level, or beyond, for a final resolution," Brian Peck, a former U.S. Trade Representative negotiator told Yonhap News Agency by e-mail.
"Given the complexity and the economic significance of the Korea-U.S. FTA, I would not be surprised to see the negotiations go near the deadline," he said.
