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Korea-U.S. FTA Talks Bogging Down

Posted December. 08, 2006 08:36,   


The fifth round of Korea-U.S. FTA negotiations, held in Big Sky, Montana, stalled when three committee meetings addressing trade remedies, drugs, and the automobile industry, broke down due to conflicts.

Additionally, as the U.S. highlighted Korea’s need to open its beef market entirely, the beef import debate, which was spurred by the recent “bone fragment detection,” will still serve to raise trouble in the continuing FTA negotiations.

Trade remedy negotiations break down-

Ambassador Kim Jong-hun, Korea’s chief negotiator, held a press conference on the morning of December 6 (local time) and said, “The U.S. did not give us a definite answer to our requests to improve the 5 anti-dumping regulations. This led us to break off negotiations with the committee on trade remedies.”

As a way to put more pressure on the U.S., Korea broke off negotiations with other committees on the category of pharmaceuticals and the automobile industry, which are the major concerns of the U.S.

Wendy Cutler, the U.S. chief representative, requested an urgent press conference, expressing her discontent by saying, “Korea’s approach asking whether to accept everything or refuse it was unreasonable taking into account that trade remedies are areas of very limited flexibility to dispute.”

Trade remedies are Korea’s top priority in these current negotiations. Since this issue is so important, Korea’s decision to break down negotiations only after 4 to 5 hours might be a strategy to find a breakthrough.

U.S. beef debate again on the table-

Regarding the issue of the beef import ban on a third shipment from the U.S., Cutler set forth her view again at the press conference, saying, “In order to get support of the people and also get ratification by Congress, Korea should open its import market for U.S. beef entirely.”

She expressed her strong discontent in particular by saying, “This is not a commercially viable trading decision between two major trading partners,” and “I am very disappointed with Korea’s decision.”

Also, Cutler said, “The U.S. would like to bring this issue to the negotiation table with Korean representatives to materialize a plan to open Korea’s beef market.” Regarding this remark, some are predicting that the U.S. will establish a separate channel to discuss Korean quarantine standards.

Meanwhile, Philip Seng, the representative of the U.S. Meat Export Federation (USMEF), announced, “(The import ban on U.S. beef) suggests clearly that the Ministry of Agriculture and Forestry of Korea has no interest in allowing beef imports,” and added, “This shows their willingness to act against free trade.”

There was also some progress-

Negotiations in other areas have been continuing normally.

In the area of services in particular, both nations came to an agreement to exempt Korean goods from additional products commission duties. These commissions are non custom fees imposed at a 0.21% rate on import goods. Last year, The U.S. levied 46 million dollars of these fees on Korean import goods.

At a negotiation on tariff offer list of industrial products, the U.S. changed its plan to advance the starting date for exempting customs duties of 326 items (along with other 206 items) such as televisions, cameras and pianos, which have been classified as middle term duty free items.

In return, Korea also advanced its starting date to phase out tariffs on 230 goods (along with other 204 items) among its duty free item list. In accordance to this, the number of goods exempted from long term custom duty decreased to about 1490 US and 1530 Korean goods.

We still have time-

Chief negotiator Kim Jong-hun said in regard to trade remedy issues, “We plan to persuade the U.S. through a variety of channels since there must be some progress in the negotiations at the end of this year.”

The fact Deputy Director- General for FTA Affairs Kim Hyun-jong reportedly is trying to contact U.S. congressmen in Washington shows that a solution with high-ranking officials might be possible as well.

Cutler said, “We did not say that we will not discuss (the trade remedy category), but we cannot answer the request whether to take it all or refuse it.”

smhong@donga.com sublime@donga.com