US warns it will not sign FTA with S Korea until beef issue is resolved
Yonhap 2007/04/05
U.S. warns it will not sign FTA with S. Korea until beef issue is resolved
WASHINGTON, April 4 (Yonhap) — The George W. Bush administration warned Wednesday it will not sign the free trade agreement (FTA) with South Korea unless the Asian trading partner fully reopens its beef market.
But it left some wiggle room in future negotiations for considering imports of goods produced from North Korea-located manufacturing plants.
"There has to be clear path before we would sign and send that up to Congress," U.S. Trade Representative (USTR) spokesman Sean Spicer told reporters.
He spoke immediately after Deputy USTR Karan Bhatia told a press conference that he made clear to Seoul the Congress would not approve the FTA without the resolution of the beef issue.
The FTA has to be signed before July 1, when temporary U.S. legislation known as the trade promotion authority expires. The negotiation deadline was aimed at having the FTA covered by this authority, which requires Congress to vote up or down on the pact without demanding amendments.
South Korea and the U.S. concluded negotiations Sunday on the trade pact, which removes within three years tariffs on 95 percent of industrial goods traded between them. The deal also eliminates non-tariff barriers on services.
The negotiations dragged on to the last possible minute, hampered by U.S. demands for an open beef market and South Korea’s sensitivities regarding rice and other agricultural market access.
Ending a three-year ban imposed after the discovery of mad cow disease at an American cattle ranch, Seoul agreed to restart imports but only for boneless products. Inspectors turned away three consecutive shipments after finding bone chips in them, but the U.S. accuses Seoul of applying unreasonably strict guidelines, saying the chips do not pose health hazards.
The U.S. is awaiting an official ruling by the World Organization for Animal Health, commonly referred to as OIE, in late May that is expected to find U.S. beef at low risk.
Spicer said a "clear path" means complying with the OIE standards, "and knowing that things were on track for U.S. beef to go through."
Bhatia said more than once in his press conference that Congress will not approve the FTA until the beef issue is settled satisfactorily for the U.S. side.
He also emphasized the trade pact does not allow goods from North Korea to come into the U.S.
One of Seoul’s demands was to have the U.S. include products from Kaesong industrial complex in the deal. Located just north of the inter-Korean border, Kaesong houses manufacturing plants that combine South Korea’s capital with North Korea’s cheap labor.
Washington has adamantly refused, balking at the idea of buying products made in a country suspected of developing nuclear weapons and condemned for rampant human rights abuses.
The two countries adroitly skirted the issue by setting up a committee to review any so-called "outward processing zone" (OPZ) on the Korean Peninsula.
Bhatia said the committee will identify geographical areas that might be designated as OPZs and consider if they meet the necessary criteria, including labor and wage practices.
When there is bilateral consensus, a recommendation will be made to respective parties for approval, he said.
While emphasizing that the current FTA does not include Kaesong goods, he also used phrases "in this FTA" and "at the present time." The committee is scheduled to meet once every year to consider OPZs.
U.S. trade with North Korea is heavily restricted under the Office of Foreign Assets Control (OFAC), which sanctions countries suspected of involvement in terrorism, proliferation of weapons of mass destruction and other threatening activities.
The OFAC requirement supercedes the FTA, Bhatia said.
"The provisions in the (FTA) agreement provide that ... OFAC-type requirements regarding sanctions and so forth, we have the right to continue to have those apply," he said.
The deputy USTR said although South Korean rice is excluded in the agreement, the U.S. will continue to work bilaterally and multilaterally to gain market access, including through the World Trade Organization (WTO).
Seoul’s minimum market access under WTO is set to be reviewed in 2014, he noted.
"We look forward to working with Korean partners up to that point in time and certainly thereafter to enhance U.S. access to the Korean market," he said.
He expressed confidence that Congress, when fully briefed of the agreement’s merits, would approve it. Support is increasingly being expressed within the U.S., he said.
The progress in the auto sector is a "huge step forward" with "unique, unprecedented and very powerful package" for eliminating tariffs and other regulatory obstacles, Bhatia said.
