March 7, 2007

Analysts await FTA talks between South Korea, US 
 

Backed by the political will of their leaders, South Korea and the United States will be able to adopt a free trade agreement (FTA) by the end of March as planned, but the big question is whether it will be acceptable to their respective legislatures and diverse interest groups, analysts said Tuesday.

After making "significant" progress in seven rounds of FTA talks that began 10 months ago, the two countries are pushing to tackle all remaining issues in the upcoming eighth round in Seoul this week.

Former US trade negotiator Brian Peck and other analysts pointed out that the stakes are too high for the sides to allow failure. South Korea, the world's 11th-largest economy, does US$74 billion worth of trade with the US and the FTA success will increase trade volume by 20 percent.

For the US, it would be the biggest commercial pact since the North American Free Trade Agreement in 1994.

A sense of optimism has spread amid reports that the US has just accepted a South Korean demand to exclude rice, a potential deal breaker, from the proposed FTA. The US has so far maintained that there should be no exceptions.

South Korea in turn has agreed to address key US demands for wider US access to South Korea's auto and pharmaceutical markets, reports said.

South Korean officials, including their chief agricultural negotiator Bae Jong-ha, however, admit that "the highest-level political intervention" is needed to tackle last-minute hurdles, including beef and other sensitive products.

In the face of strong protests by farmers and anti-globalization activists, South Korean President Roh Moo-hyun has already voiced support for the proposed FTA with the US, adding there is much to lose for both countries if FTA is not agreed upon.