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Gains seen in US-South Korea trade talks

Houston Chronicle, USA

Gains Seen in US-South Korea Trade Talks

By Kelly Olsen, AP Business Writer

11 August 2006

SEOUL, South Korea - South Korea and the United States reported an apparent breakthrough in free-trade talks Friday after bickering over pharmaceuticals cut short negotiations last month.

Washington accepted a change in South Korea’s Health and Welfare Ministry to a so-called "positive list" system, whereby only designated drugs are reimbursable under the country’s health insurance system.

U.S. negotiators had taken issue with the switch from a "negative list," in which only certain drugs are excluded, saying the change discriminated against foreign pharmaceuticals.

"We agreed to work on the basis of the positive list," said William Maurer, a U.S. Embassy spokesman.

Seoul and Washington announced in February they would enter ambitious talks that, if successful, would be the biggest such accord for the U.S. since the North American Free Trade Agreement of 1993.

Formal negotiations kicked off in June in Washington, followed by July’s second round in Seoul, the final day of which was canceled amid the disagreement over drug reimbursements. The sides want to conclude an agreement by the end of this year so they can submit it to their respective legislatures.

The U.S. is under particular pressure as President Bush’s authority to "fast track" a deal _ enabling U.S. envoys to negotiate an agreement that can be submitted to Congress for a yea-or-nay vote without amendments _ expires in mid-2007.

The proposed agreement has met fierce opposition from South Korean agricultural and labor organizations as well as the country’s film industry amid concern it would jeopardize livelihoods and cost jobs in the world’s 10th-largest economy.

Thousands of protesters took to the streets of Seoul during last month’s talks, squaring off with riot police. There were some clashes, though no major injuries were reported.

Besides pharmaceuticals, Washington wants more access for U.S. automobiles, farm products and other goods. Seoul wants South Korean products manufactured in North Korea to be subject to the agreement. The U.S. says it can’t accept that.

A third round of talks is planned in Seattle from Sept. 6-9.