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South Korean and U.S. negotiators wrapped up their latest round of free trade agreement talks on Wednesday after making "substantial" headway in their nine-month-old negotiations.

Encouraged by a telephone conversation by their presidents expressing their strong commitment to the success of the talks, both sides agreed to meet again in early March, a few weeks before their preset deadline.

"We've just concluded our seventh round, and in my view, the most successful negotiating round so far," Wendy Cutler, the chief U.S. negotiator, told reporters after ending the four-day round.

"Despite the icy conditions outside, there have been signs of spring in the negotiations, and the mood of these meetings has been more upbeat than it has been for several rounds," she said, referring to the winter weather in the U.S. capital.

Cutler said she had no major breakthrough to announce right now but she was confident that the talks can be successfully wrapped up by the end of March.

Cutler's South Korean counterpart, Kim Jong-hoon, said a deal was not imminent but a solid foundation has been laid for a future agreement.

"At this point, I can say both sides have already laid the groundwork to sign an agreement before the deadline," Kim said, adding that more work has to be done to tackle unresolved issues.

U.S. officials have until April 2 to submit a deal for a mandatory 90-day congressional review for a yes-or-no vote without amendments under U.S. President George W. Bush's trade promotion authority, which expires on July 1.

The deal, if adopted, also requires approval by South Korea's one-house National Assembly where supporters outnumber opponents.

Several hours earlier, South Korean President Roh Moo-hyun on a state visit to Spain had a 10-minute telephone conversation with U.S. President George W. Bush, during which they reconfirmed their strong commitment to the success of the trade talks, both sides said.

The main purpose of the telephone call was to assess the results of the latest round of six-party nuclear disarmament talks that ended in Beijing on Tuesday after adopting a much sought-after deal for North Korea to disarm in exchange for aid and political rewards.

The two presidents "agreed to continue encouraging one another, allowing the (free trade agreement) delegations to demonstrate flexibility and take the initiative in seeking a mutually satisfying way of reaching agreement in a timely manner," Roh's office said in a statement posted on its Web site.

The top South Korean negotiator, Kim, said delegates were elated by the telephone conversation by the two presidents.

Despite the lack of a clear breakthrough and a looming deadline in the trade talks, officials of both sides were more positive than ever before.

"I don't underestimate the challenges facing us, but the prospects are good and we made substantial progress this week," Cutler said.

Both sides decided to hold the next and eighth round in Seoul from March 8-12. South Korean officials said one more round, a ninth round, may likely be held in late March.

Some key issues, including U.S. anti-dumping trade remedies and South Korean auto taxation and pharmaceutical pricing, remain unresolved but Cutler said the negotiators have "a clear idea of the path forward."

Cutler cited that specific achievements reached in Washington this week include duty-free status for electronically traded products such as software, music and movies and rules of origin for critical products such as chemicals, pharmaceuticals and plastics.

"On industrial market access, the sides agreed to tariff improvements in important sectors such as chemicals, cosmetics, industrial machinery and IT," she said.

Kim said both sides have agreed to immediately abolish tariffs on about 85 percent of industrial goods so far, excluding some sensitive farm products and automobiles.

One of the most sensitive issues that both sides have barely touched is rice, the South Korean staple.

While Cutler has said rice would be discussed at some point, Kim has argued rice should be excluded from the proposed deal, given the crop's political sensitivity for South Korean farmers. Kim said he was determined to shield rice from the deal.

Stakes are high. Two-way trade between South Korea, the world's 11th largest economy, and the U.S. reached US$74 billion in 2006.

Some studies show that if a deal is adopted, it would increase the total trade by 20 percent.

South Korean officials also emphasized the negotiations are politically important amid some signs of friction with the U.S., notably because of the North Korean nuclear crisis that broke out in late 2002.

"If the FTA is signed, it will be the most important event in South Korea-U.S. relations since the signing of the mutual military alliance in 1953," said Park Yoon-shik, a professor at George Washington University.
Washington, Feb. 14 (Yonhap News)