November 28, 2007

South Korea- US FTA sees approval by February 2008

South Korea's trade minister said on Tuesday (November 26) he expected parliament to ratify its free trade deal with the United States by February next year, but cautioned a backlash from local beef and car sectors on an expected trade pressure from the US.

The two countries signed a free trade agreement (FTA) in June that is estimated to boost their US$78 billion a year in annual trade by about US$20 billion. Legislatures in the two countries have yet to approve the pact.

The US negotiating team said in October they are hoping for an approval from the Congress in the first half of 2008 but some lawmakers said a vote would likely come later.

US lawmakers have said they would not vote for the deal unless South Korea moves to settle a separate dispute by fully opening its market to US beef imports.

Trade minister Kim Jong-hoon said the Korean public is also tired of "no beef, no FTA" rhetoric by some US congressmen.

At present, South Korea, which banned all imports in 2003 following an outbreak of mad cow disease in the United States, allows only imports of boneless US beef from cattle younger than 30 months.

US beef returned to South Korean store shelves earlier this year and was given a warm reception by consumers who queued to buy the product that typically sells for less than half the price of similar cuts of Korean beef.

In October, however, South Korea temporarily halted imports after finding banned spinal material in a shipment.

Kim said South Korea, once the third-largest overseas market for US beef, is still reviewing safety procedures and the credibility of the US quarantine system after packers sent prohibited material.