KDB Excluded from KOR-U.S. FTA

On the second day of the seventh round of the talks on the Korea-U.S. Free Trade Agreement (FTA), both countries made progress in finding common ground on some key issues. On Monday, leading negotiators from the two countries showed a strong willingness to move forward with “2+2 negotiations” with their second negotiators.

Both sides are trying to agree on excluding state-invested institutions, such as the Korea Development Bank (KDB) and the Industrial Bank of Korea, from the FTA framework.

Instead, negotiators are considering a “package deal” that allows U.S. firms operating in Korea to gain access to and transfer business information in Korea except for client information to their headquarters in the U.S.

Shin Je-yoon, a South Korean negotiator in charge of financial services, said, “We are finding common ground on allowing U.S. firms to transfer financial information in exchange for excluding the Korea Development Bank from the FTA.”

The U.S. negotiators in the investment sector took a step back, saying they would review Seoul’s request to exclude real estate and tax policies from a list of investor-government lawsuit areas.

The two sides have virtually agreed on provisions involving electronic authorization and transfer of information between borders in the electronic commerce sector.

Nam Young-sook, a Korean negotiator in charge of the e-commerce sector, said, “The U.S. seems to be more flexible this time.”

South Korean Chief negotiator Kim Jong-hoon said to reporters, “At this stage, a willingness to strike a deal is important. Both sides seem to have a strong willingness.”

Eighteen South Koreans and 30 Americans joined forces to protest the ongoing negotiations for the U.S.-Korea Free Trade Agreement in front of the Washington Court Hotel, demanding a conversation with leading negotiators from both countries.

abc@donga.com