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The eighth round of free trade talks between Korea and the U.S. ended in Seoul on Monday with several key issues unresolved. The two sides will try to conclude an eleventh-hour deal in two rounds of high-level talks. The free trade talks, which started last June, have been a success in small matters but failed to clinch a big deal. The two reached a series of agreements on competition, government procurement and customs clearance in this round but were stuck over more critical issues like agricultural goods, car taxes, pharmaceuticals, textiles and anti-dumping rules.
¡ß Progress on finance
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Korean free-trade chief negotiator Kim Jong-hoon and his counterpart Wendy Cutler hold hands during a media briefing at in Seoul on Monday morning, after the eighth round of formal talks aimed at a free trade deal between Korea and the U.S.
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Korea and the U.S. made big headway on the financial sector on Monday. Seoul won concessions from Washington on one of thorniest financial issues -- exempting state-run financial institutions from market opening. Beneficiaries include the Korea Development Bank and the Industrial Bank of Korea. In return, Korea accepted the U.S. demand that Korean affiliates of U.S. financial firms will be allowed to share financial information with their overseas headquarters under the same U.S. protection as their mother companies. The new rule will go into effect within two years after the FTA is ratified.
The two effectively reached agreement on the environment, e-commerce, technical barriers to trade, sanitary and phytosanitary and financial sectors, with only technical differences remaining. In e-commerce, no customs will be imposed on electronic trade between the two countries. In technical barriers, the government will be able to intervene in choosing technology standards if it has reasonable policy goals.
¡ß Bones of contention
Although the two sides say a deal is close, some hairy issues like agriculture, cars, textiles, anti-dumping and the inclusion of goods produced in the Kaesong Industrial Complex in North Korea still remain to be worked out. U.S. chief negotiator Wendy Cutler reiterated that access of U.S. cars to Korean markets remains her country¡¯s priority, while her Korean counterpart Kim Jong-hoon said some sensitive issues still require ¡°hard work and attention.¡±
During the eighth round, high-level talks on the margins of plenary negotiations were held to settle agricultural, textiles and financial issues. But the textile talks collapsed when the U.S. proposal for items subject to market opening fell short of Korea¡¯s expectations. In the agricultural talks, the U.S. stuck to its demand that all markets must be open. Korean chief agricultural negotiator Bae Jong-ha said the two sides clashed even on principles. Although Korea reportedly softened its demand for the U.S. to ease anti-dumping rules for Korean exporters, Cutler still described it as hard to accept. Conversely, U.S. demands to change Korea¡¯s drug-pricing system are unacceptable to Seoul.
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A poem by Eulji Mundeok, a renowned marshal during the Koguryo kingdom and sent to his foe Yu Zhongwen, who had led an invasion by China¡¯s Sui dynasty in 612 AD. The Korean agricultural negotiating team sent the poem to the U.S. delegation on Monday, the last day of the eighth round of bilateral trade talks./Yonhap
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¡ß Success depends on big deal
Still, Seoul and Washington stand a higher chance of concluding the FTA than ever since they are committed to wrapping up the trade negotiations by late this month so it can be ratified before the Bush administration¡¯s authority to fast-track trade deals expires. The two are expected to reach for a ¡°big deal¡± in critical issues at high-level talks to be held in Seoul and Washington on March 19. They will determine success or failure. But the eight rounds of trade negotiations did help Korea and the U.S. narrow the gap on less critical issues.
(englishnews@chosun.com )
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