Korea could drop Kaesong goods in FTA talks with US
Chosun Ilbo, Korea
Korea Could Drop Kaesong Goods in FTA Talks With U.S.
10 July 2006
The government could give up trying to persuade the U.S to recognize products from the inter-Korea Kaesong Industrial Complex as made in South Korea in free trade negotiations. “It has become impossible to win Washington’s consent about the Kaesong issue because of North Korea’s sudden missile launches,” an official here said. “Depending on developments, we may insist, but at the moment we’re considering abandoning the issue in the free trade talks and instead later linking it with the resumption of six-party talks on the North Korean nuclear issue.”
Instead, Seoul plans to use the issue as a bargaining chip in the talks and ask the U.S. for its part to scale down demands for open agricultural markets, the official said. Since the Kaesong industrial park went into operation in 2004, Seoul has asked every partner in FTA talks to recognize products made there as South Korean provided more than 60 percent of material come from the South. But the U.S. has dug in its heels, saying its bugbear North Korea is no party to any FTA between Seoul and Washington.
South Korea and the U.S. started the second round of FTA talks at the Shilla Hotel on Monday. It runs till Friday. The two sides will discuss tariff reduction rates on manufacturing and agricultural goods, the timeframe till tariffs are scrapped completely, and the extent of opening the service sector. A stumbling block will be intense U.S. pressure on Korea to open the agricultural market. Assistant U.S. Trade Representative Wendy Cutler, who heads her country’s delegation, hinted as much, telling reporters the principles for proposals on tariff reductions must be decided before the proposals are exchanged.
That is being read as a bid to limit the proportion of products on the reserve list in advance to stop South Korea from adding more agricultural products. The U.S. has already indicated that the agricultural market will be a priority in this round.
