South Korea, U.S. Try Again to Reach Free Trade Deal

Kim Jong-hoon, South Korea's chief negotiator in free trade talks with the United States, looks toward the ground, his lips tightly pursed.

The image, which appeared in full-page South Korean newspaper ads last month, seemed to clash with the government's upbeat outlook on the negotiations in text above the photo: "There is a ways to go, but hopes are increasing."

After five rounds of talks since June, South Korea and the U.S. have so far reported little progress in negotiations toward an ambitious deal that, if completed, would be the biggest for the U.S. since the North American Free Trade Agreement of 1993.

The latest round in Montana last month failed to bridge numerous gaps, including Seoul's request for Washington to change its antidumping laws and patent protections for American pharmaceutical companies. Other thorny issues include autos and agriculture.

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Kim and Assistant U.S. Trade Representative Wendy Cutler, Washington's chief negotiator, will try again next week in Seoul during a sixth round starting Monday.

They will be in overtime, having missed their initial, albeit informal, goal of wrapping up a basic deal by the end of last year.

"We've got to see significant progress in the next round and we've got to really narrow down the differences," said Myron Brilliant, vice president for Asian affairs at the U.S. Chamber of Commerce in Washington.

Timing is important. U.S. President George W. Bush's ability to "fast track" an agreement through Congress, meaning he can submit it for a straight up-or-down a vote without amendments, expires at the end of June.

But any agreement would have to go to Washington by the end of March because lawmakers would need about three months to review the agreement before a vote. The deal would also have to be approved by South Korean lawmakers.

The U.S. is also trying to wrap up a free trade agreement with Malaysia by that time.

Almost a year ago, South Korean Trade Minister Kim Hyun-chong and then-U.S. Trade Representative Rob Portman optimistically announced that the two sides would launch the talks. At that time, Kim described the decision as "the most important event (in U.S.-South Korean relations) since the signing of the military alliance in 1953."

An agreement would slash tariffs and other barriers on a wide range of goods and services from the two nations, which already do $72 billion worth of business a year. South Korea, the world's 10th-largest economy, is already the U.S.'s seventh-biggest trading partner.

Free trade, however, has been a tough nut to crack, as the sides try to balance competing domestic interests with a general consensus among economists that a deal would boost trade.

The effort has been met in South Korea with street protests, sometimes violent, as farmers in particular oppose any reduction in protections they receive for rice.

"Right now is a very difficult situation for both countries," said Lee Jun-kyu, head of the Americas team at the Korea Institute for International Economic Policy in Seoul. "Both governments have to show top-level political commitment."

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He cited "a very negative mood in the Korean government right now" after the Office of the U.S. Trade Representative last month rebuffed Seoul's request to soften U.S. rules governing imposition of penalty tariffs on foreign products sold at unfairly low prices -- a practice known as dumping.

South Korea is pushing for procedural changes to U.S. laws to minimize the chances of antidumping tariffs being levied against its products. One of its proposals calls for talks between the two sides before the U.S. begins a probe in an antidumping case.

The USTR, however, reported to Congress that Seoul's proposals on U.S. trade remedy laws would not appear in a final free trade agreement.

The gulfs have made some conclude that an agreement is not feasible.

"I remain unconvinced the Bush Administration can deliver a deal that safeguards American interests and provides a balance of benefits between the two economies," Peter Morici, a professor at the University of Maryland and former chief economist at the U.S. International Trade Commission, said in an e-mail interview.

Despite the obstacles, Brilliant said that a deal remains possible. He dismissed concerns that the new Democratic Congress will be more hostile than the previous Republican-controlled one, saying a "good agreement" will win approval.

KIEP's Lee is also optimistic but added that momentum needs to be revived.

"Both governments have to show top-level political commitment," he said.

South Korean President Roh Moo-hyun and Bush reaffirmed their support for the agreement at a summit in Washington in September.

The two leaders spoke by telephone earlier this week for about 10 minutes, discussing Iraq and North Korea. They don't appear to have addressed difficulties in the free trade talks, according to the contents of a statement on the Web site of Roh's office.

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