As S.K.-U.S. free trade talks near end, much unresolved

Posted on : 2007-02-12 12:44 KST Modified on : 2019-10-19 20:29 KST

With two rounds reportedly remaining, many in S.K. fear a ’spree of concessions’

South Korea and the U.S. began their 7th round of negotiations on a free trade agreement (FTA) in Washington D.C. on February 12.

Before this round of negotiations, the Korean government made it public that it would conclude the negotiations by early April, against considerable domestic opposition to many of the FTA’s proposed tenets. In a February 8 hearing by the National Assembly Korea-U.S. FTA Special Committee, chief FTA negotiator Kim Hyun-jong said that "the 8th round will take place in mid-March. In between the 7th and 8th rounds, there will be a meeting between high-ranking negotiators, and after the 8th round of negotiations, there will be a meeting [at the presidential level]."

Kwon Oh-kyu, the deputy prime minister of economy, mentioned that "once the 7th and 8th negotiations are concluded, about 97 to 98 percent of the issues will be resolved."

Experts say the Korean government plans to conclude the negotiations by the end of March because they should be finished by April 2 to give the U.S. side the requisite 90 days to inform Congress before the Trade Promotion Authority expires. Once this trade promotion pact expires, all aspects of the FTA must be approved individually by Congress, and with a Democratic majority, the trade deal may face stiff opposition from legislators seeking to protect the interests of small farmers and certain U.S. industries from stronger competition.

However, many in the Korean public oppose the government’s alleged plan to conclude the talks in line with the deadline set by the U.S. But the Korean government maintains the optimistic view that the president, who is responsible for ratifying the final agreement, and the National Assembly, a majority of which must also agree on the trade deal, do not think that following the U.S.’s deadline is an inappropriate action.

Professor Jung In-kyo of Inha University and a proponent of the Korea-U.S. FTA, said that "the Korean negotiators think that they are only responsible for the conclusion of the negotiations, and that the rest should be handled by politicians. The government knows full well that no prominent presidential candidate objects to the Korea-U.S. FTA and that the majority in the Assembly, although there are some dissenting opinions, agrees that we need the FTA with the U.S."

Korean negotiators will engage in a full-scale give-and-take negotiation on major issues beginning with this 7th round, observers said. The Korean side plans to revive working-level negotiations in three areas, including the Trade Remedies issue as well as the automotive and medical markets, negotiations that did not take place at the last round.

There are concerns that the final negotiation rounds will amount to a one-sided ‘spree of concessions’ on the part of South Korea, rather than a give-and-take, as Korean negotiators are binding themselves to the U.S. deadline. The negotiators have already simplified their demands regarding the special excise tax rate on automobile imports and have finalized a plan to decrease the number of factors by which auto import taxes are determined. Experts say these concessions may cause import tax imbalances between the two countries, and also weaken South Korean regulations on automobile emissions. In the field of medicine, the Korean government hinted to the Assembly in the hearing on February 8 that U.S. demands for extension of patent rights for pharmaceuticals will be granted. It also said that "the acceptable concerns of the U.S. on optimization of prescription costs will be discussed," a move which some experts worry will undermine South Korea’s health insurance system.

But despite such reported concessions already given, Seoul suggested it would yield further to Washington on the trade tariffs and market opening agreements regulated under the Trade Remedies section, the area in which Korea had said it would take the most aggressive bargaining stance. Regarding the Trade Remedies, a government official said during the February 8 Assembly meeting, "We will do our best to state our case, even if the U.S. will not accept our demands."

Experts say that, worn down by the persistent ‘non-tariff barriers’ built by the U.S., Korea has already given up on its textile market demands, on which it was once believed to have the upper hand.

When the U.S. demanded the submission of sensitive business information and on-site inspection of Korean textile companies by U.S. customs authorities on the pretext of preventing the ‘rules of origin’ of a product from being broken, Korean negotiators decided to "positively consider" the potentially damaging requirements, sources said. In the area of government procurement of international contracts, Korea demanded that each U.S. state market be opened in order to make the situation more equal, but gave up its demands when the U.S. held onto its position to exclude the issue from the trade deal. In addition, tariffs placed on sensitive products that could have a strong impact to Korea’s agriculture, such as beef, pork, barley, and apples, will also be negotiated, the sources said, and the extension of intellectual property rights as demanded by the U.S. will also "be considered positively."

On the South Korean side, 180 staff members in 17 negotiating groups and one task force will participate in the 7th round of negotiations. The government procurement group will hold separate negotiations in Geneva, Switzerland on February 13.

Meanwhile, Korean anti-FTA activist groups said they would send about 20 representatives to Washington to rally against the FTA alongside local nongovernmental organizations also opposed to the trade deal.

Please direct questions or comments to [englishhani@hani.co.kr]

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