February 13, 2007

South Korea moves towards "package" deal with US

Racing against time, South Korea-US free trade agreement talks moved into a second day on Monday, with both sides expected to try to reach a "package deal" on key pending issues.

The two sides have already reported progress in most less sensitive areas, but admit that a real breakthrough would not come without agreement in three most sensitive areas, they being anti-dumping remedies, cars and pharmaceuticals.

The two countries have until April 2 to adopt a deal under US President George W Bush's "fast-track" trade promotion authority. The latter expires on July 1.

The two top negotiators, South Korea's Kim Jong-hoon and US' Wendy Cutler were trying to find a compromise on the three most sensitive issues outside the conference room, South Korean official said.

South Korean President Roh Moo-hyun is a strong supporter of the proposed deal with the US. The US is South Korea's second-largest export market after China, with two-way trade reaching US$74 billion in 2006.

Before leaving Seoul, the South Koreans said they would try to reach a "package" deal with the US on those three issues.

South Korea is seeking to ease US anti-dumping rules, while the latter is interested in changing South Korean tax and regulatory systems that may restrict US auto and pharmaceutical shipments.

Also, South Korea's ambassador to the US, Lee Tae-sik, indicated that a trade dispute with Washington over US beef imports would be resolved amicably.

The beef issue was triggered by South Korea's recent rejection of three American beef shipments totalling 22.3 tonnes after bone chips were found in them in violation of an agreement under which Seoul resumed imports after a three-year ban.