U.S., Korea Aiming for Free Trade Agreement by Early 2007

By Bruce Odessey
Washington File Staff Writer

Washington - The United States and South Korea are trying to conclude difficult free-trade agreement (FTA) negotiations by late 2006 or early 2007, the lead U.S. negotiator says.

Wendy Cutler announced at the October 23 start of the fourth round of negotiations on the Korean island Jeju that the U.S. side was submitting improved offers on agricultural and industrial goods to signal its determination to make progress.

By completing negotiations by early 2007, the Bush administration could submit an agreement for consideration by Congress under trade promotion authority (TPA), otherwise known as fast track, which expires in July.  Under TPA, Congress restricts itself only to approve or reject a negotiated trade agreement, within strict time limits and without amendments.

"But this doesn’t mean that the United States or Korea are going to rush to conclude this agreement just for the sake of concluding it before TPA expires," Cutler said.

Whether Congress might extend TPA beyond June remains highly uncertain.

Since the two sides launched FTA negotiations in February they have reported little progress even though they postponed consideration of the most politically sensitive issues, such as U.S. access to the Korean rice market.

Cutler described the improved offers from the United States as accelerating the stages of tariff cuts amounting to more than $1.3 billion on textiles, $1 billion on other industrial goods and $135 million on agricultural goods - the latter representing 60 percent of Korea's potential farm exports.

Textile tariffs are of special interest to the Koreans.  Among the U.S. goals are better access for U.S. autos and pharmaceuticals, more openness to U.S. investment and stronger Korean protection for U.S. copyrights and patents, according to Cutler.

"I sincerely hope that I have good news for you on all of these issues on Friday, at the end of our round," she said.

Cutler freely described how difficult the negotiations have become, citing "a lot of concerns and sensitivities on both sides."

According to published reports, police thwarted about 1,000 demonstrators, most of them Korean farmers and other workers stridently opposed to an FTA, from interrupting the October 24 negotiating session.

At about the same time Deputy U.S. Trade Representative Karan Bhatia was addressing students at Korea's Yonsei University about the benefits of an FTA.  He rebutted arguments that as a result of it "the Korean agriculture sector will be wiped out overnight."

"No one is saying that immediate free trade in agriculture is a requirement of finalizing this agreement," Bhatia said. "Transition periods have been used in past FTAs to address sensitive products and would likely be employed here."

If TPA expires, he said, years might pass before Congress considers a U.S.-Korea FTA.

"Korea should not sign any deal it is not comfortable with," Bhatia said. "But if there is a deal to be done, would it not be in everyone’s best interests to get it done while we still can?"

The transcript of Cutler's news conference and the full text of Bhatia's remarks are available on the USTR Web site.

For additional information on U.S. policy, see The U.S. and the Korean Peninsula.