US wants SKorea free trade deal by end-2006: envoy http://today.reuters.com/news/articlenews.aspx?type=worldNews&storyid=2006-03-07T083025Z_01_SEO283961_RTRUKOC_0_US-TRADE-KOREA-USA.xml
Tue Mar 7, 2006
By Jon Herskovitz
SEOUL (Reuters) - The United States wants to conclude negotiations for a free trade agreement with South Korea by the end of this year, its chief negotiator to talks set to formally begin in June said on Tuesday.
Assistant U.S. Trade Representative Wendy Cutler met South Korean Ambassador Kim Jong-hoon on Monday in preliminary talks for what would be the biggest U.S. trade pact since the North American Free Trade Agreement of 1994.
"Trade promotion authority expires in mid-2007," Cutler said, referring to a White House power to negotiate trade deals that Congress can pass or reject, but cannot amend.
"And to meet this deadline, my marching orders are to seek to conclude this comprehensive agreement by the end of the year," she told a gathering of U.S. business executives in Seoul.
Kim, South Korea's chief negotiator, said on Monday he had set no deadline to the talks between the partners with $72.5 billion trade.
Cutler said there is bipartisan support in Congress for a trade deal, which she described as a "win-win" for both countries. The United States is South Korea's second-largest trade partner while Seoul is Washington's seventh-largest partner.
"At the highest level of both governments, there is a true commitment to this negotiation, which will give us the extra resolve needed to conclude a high-quality agreement in a timely fashion," she said.
CONTENTIOUS ISSUES
Cutler said some studies indicated a deal could increase the volume of trade between the two by about $20 billion and result in as much as a 2 percent increase in South Korea's gross domestic product.
The office of South Korea's prime minister said on Tuesday that the cabinet has approved a measure to halve a quota requiring cinemas to show local films for 146 days a year to 73 days.
Washington had advocated the cut, saying the quota was a barrier to a free trade agreement. Members of South Korea's movie industry have held protests against cutting the quota, saying it protects the local industry from being trampled by Hollywood.
Other Korean opponents to the deal, such as farmers and unionized labor, fear free trade will spark a flood of cheap imports from the United States that could ruin their livelihoods. They have promised fierce protests. It has also been difficult for the White House to get trade deals through Congress, where deals that have been approved have typically squeaked by with a margin of a few votes.
Rice will be one contentious area in the talks between the two countries. South Korea insists rice will not be part of a free trade deal, while the United States says it must be included in the talks.
Another contentious area is likely to be exports of South Korean autos to the United States. U.S. car makers are already feeling the heat as they lose market share to Asian producers.
South Korea's service sector could also create bottlenecks in the talks because of large state involvement or restrictions on foreign ownership in such fields as telecommunications.
"The negotiation will not be easy," Cutler said.
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