3/12/2007

Korea-U.S. Agree in Two More Areas in FTA

Chosun Ilbo

Korea, U.S. Make Headway Toward FTA

Korean and U.S. trade negotiators reached agreement on the customs and government procurement at their eighth round of bilateral free trade talks, which is under way in Seoul. Including antitrust measures, where the two sides agreed Thursday, they have now concluded negotiations in three out of 19 areas under discussion. By concluding deals in the less critical sectors first, they have been able to move faster in trade negotiations toward complete conclusion in all fields.

But thorny issues like agricultural market and auto taxes remain a stumbling block, and the two sides plan to settle them in two rounds of high-level negotiations after this round wraps up. Korean top negotiator Kim Jong-hoon told reporters on Sunday, the fourth day of talks, that Korea’s attempt to protect its agricultural market and the U.S.’ demand that Korea change its car tax regime based on engine displacement will remain knotty issues until the end. Trade ministers and chief meet on March 20.


Police clash with members of anti-free trade agreement organizations including the Korean Alliance Against KORUS FTA and the Korean Peasants League during a protest in Gwanghwamun, Seoul, on Saturday.



In the customs talks, the two sides agreed to streamline the clearance process to speed up the handling of imports and exports. They also agreed to check the origin of products to prevent a detour import of merchandise manufactured in a third country. In government procurement, Korea got its wish to exempt procurement by local governments and public companies from market opening, while in the U.S. the same will be true for state governments. They also agreed not to open up the school meal market. But agriculture, textiles and auto taxes are still up on the air. High-ranking textile talks collapsed on Sunday as the U.S. market opening proposal fell short of Korea’s expectations.

Meanwhile, a survey showed Sunday that 60.8 percent of respondents supported a free trade pact with the U.S., up 5.4 percentage points from a similar late last year. Some 33 percent answered that they opposed an FTA. The survey was conducted by the KORUS FTA Industry Alliance, a private group supporting the FTA, late last month. More than half of respondents expected the FTA to benefit Korea in general. As points for further consideration in the trade talks with the U.S., opponents cited compensation for people who stand to lose out under the FTA like farmers, the need to strengthen the government’s negotiating power and public health guarantees.

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SeanHayes@ipglegal.com