Chief US envoy on South Korea FTA talks says ’success is still within our reach’
The Hankyoreh, Seoul
Chief U.S. envoy on South Korea FTA talks says ’success is still within our reach’
21 March 2007
Washington, March 21 (Yonhap News). The top U.S. negotiator on free trade agreement (FTA) talks with South Korea expressed optimism Wednesday that both sides can strike a deal ahead of an end-of-March deadline, though she conceded key sticking points remain.
"Success next week is still within our reach," Assistant U.S. Trade Representative Wendy Cutler told reporters after ending three days of informal talks. "I know that negotiators on both sides will work very hard to succeed in this historic effort." Cutler cited "some progress" in sensitive areas such as intellectual property rights, financial services and rules of origin, but acknowledged both sides failed to narrow differences in farm goods and cars.
"We need to keep in mind that we are now closing in on the most difficult issues," Cutler said. "We will be returning to Seoul next week with the aim and determination of successfully concluding the Korea-U.S. FTA." Next week, those outstanding issues will be referred to higher-level talks between their bosses, South Korean Trade Minister Kim Hyun-chong and Deputy U.S. Trade Representative Karan Bhatia, who will hold last-minute talks in Seoul until a deal is struck, South Korea’s chief negotiator said previously.
"Even a successful agreement undoubtedly will not meet the high expectations of some groups, both in the U.S. and Korea," Cutler said. "But, in a negotiation, not everyone gets everything they want." After three days of "backroom" talks in Washington between Cutler and her South Korean counterpart Kim Jong-hoon, the two sides have fewer than 10 unresolved issues.
On Tuesday evening, Kim briefly met a group of South Korean reporters in Washington but was tight-lipped on specifics. He said, however, that he was optimistic that a deal can be reached by the end of this month.
"No matter how high the mountain ahead of us, we can climb over it and pass," Kim said, alluding to the difficulty of the negotiations. "There have been no mountains in South Korea that I have not been able to climb over."
Of the "fewer than 10 contentious issues" that remain, Kim singled out agriculture and automobiles as the most difficult to tackle. He said attempts were being made to make a "package" deal on those issues.
"But we can’t make a deal like trading textiles for agriculture.
There can be a different solution to it other than that," he said without elaborating.
Kim said other outstanding issues include anti-dumping measures and pharmaceuticals.
"I’m still optimistic," Kim said. "If there is a deal, I expect it to be announced at the end of March 30." Under his "fast-track" trade promotion authority, U.S. President George W. Bush has until April 2 to notify Congress of his intention to sign a deal with South Korea. March 30 is the last working day before the deadline.
Lee Jae-hoon, South Korea’s deputy commerce minister who separately met Scott Quesenberry, chief textile negotiator for the U.S. side, reported "some progress" in their two-day talks in Washington, but added the issue will be also carried over to the higher-level talks next week.
"Both sides confirmed they will try best to swiftly agree on the textile issue in time," Lee told reporters, declining to give any specifics. "Agreement is up to the higher-level talks." As talks near a conclusion, the U.S. is putting pressure on South Korea to open its market wider to American automakers.
The U.S. is asking South Korea to abolish its 8 percent tariff on U.S.-made cars immediately and revise Seoul’s engine displacement-based tax system on imported vehicles. In return, South Korea is demanding that the U.S. phase out its 2.5 percent auto tariffs within three years.
In 2006, South Korea shipped 700,000 cars to the U.S., while the U.S. sold only 4,000 cars in South Korea.
"The U.S. now has a US$11 billion deficit in auto trade with Korea, which is 82 percent of the total deficit between the two countries," said Stephen Collins, president of the U.S. Automotive Trade Policy Council, in a congressional hearing on Tuesday.
In simple numbers, Collins said auto trade between South Korea and the U.S. is so "lopsided" that it cannot be seriously justified by "any credible economic or market-based rationales." The stakes are high for the two countries, which did $74 billion in two-way trade in 2006. Some studies show that a deal would boost total annual trade by 20 percent.
