News Clippings 4/21/2006
Ellinghuysen & KTIC Rural Radio
US, S. Korea to exchange first trade texts in May
Washington (Reuters) – The United States and South Korea will exchange first drafts of a proposed free trade agreement next month, laying the groundwork for intense talks that formally begin in June, U.S. and South Korean officials said on Wednesday.
“I’m certain this negotiation is going to have a lot of high and low moments,” Wendy Cutler, assistant U.S. trade representative for Japan and South Korea, said during a discussion on the proposed pact.
“You can only conclude we certainly have our work cut out for us” to finish by year end, Cutler said.
But before diving into tough issues such as Korean auto and rice import barriers and U.S. textile tariffs, Washington has already agreed with Seoul’s suggestion to call the pact the Korea-U.S. Free Trade Agreement, or KORUS FTA.
“If you exchange K with Ch, the name is much more harmonious,” said Seok-young Choi, economics minister at South Korea’s embassy, explaining how it should be pronounced.
The Bush administration notified Congress in February that it planned to begin free-trade talks with South Korea, the world’s 10th biggest economy and the United States’ seventh-largest trading partner.
But under U.S. law, it had to wait at least 90 days before beginning formal talks. The first round is scheduled for the week of June 5th in Washington. The two sides are under pressure to finish by late 2006 so the pact can be considered by Congress before the White House’s trade promotion authority expires the middle of next year.
That legislation allows the Bush administration to negotiate trade agreements that can not be changed by Congress. Once it expires, lawmakers would be free to make changes that could unravel the accord.
Both Cutler and Choi they were optimistic a deal could be reached, despite the difficult decisions that lay ahead.
WORKING GROUPS
Agriculture is one South Korean sector that could lose under the pact so Seoul will ask for long and flexible implementation periods to phase out tariffs, Choi said.
Because South Korea is such a large market, there is much more U.S. commercial interest in the agreement than has been the case for other recent trade pacts, Cutler said.
The two sides have established 17 negotiating groups in areas ranging from agriculture to services.
Two other “working groups” will tackle automotive issues and pharmaceuticals and medical devices.
Another difficult area of the negotiation is how products from a South Korean-run industrial park in North Korea will be treated under the pact.
Seoul sees the Kaesong Industrial Park as a model for the eventual unification of the Koreas, but Washington has balked at giving preferential treatment to products produced there.