No clear sign of progress in S. Korea-U.S. FTA talks

Free trade negotiators from South Korea and the U.S. ended the second day of talks on Tuesday without a clear breakthrough on a range of core issues, including farm goods, services and trade remedies, both sides said.

There also was no meaningful headway in pharmaceuticals and autos, over which the sides have shown wide differences, they said.

Rice, the Korean staple, was not discussed.

South Korean officials said that they focused on trade remedies, while the U.S. sought to open wider South Korea's pharmaceutical market.

"We can say the ball is now in the U.S. court," said Beck Du-ock, a South Korean delegation member, commenting on Washington's refusal to ease or change its anti-dumping regulations. Asked whether the fifth round of talks under way in Montana will hit a snag unless the U.S. accepts South Korean proposals related to trade remedies, Beck said, "You can say so."

Wendy Cutler, the top U.S. negotiator, showed particular disappointment at the lack of progress in pharmaceuticals.

"We are extremely disappointed with the situation on pharmaceuticals with respect to FTA," Cutler told reporters. "We are very disappointed that our concerns and our suggestions weren't incorporated or reflected in any manner in the draft regulation that Korea is now finalizing and intends to put into place by the end of the year."

The new Korean pharmaceutical policy, which allows only government-approved drugs to be reimbursed under a national health insurance system, has been criticized by powerful U.S. pharmaceutical companies for discriminating against them because their expensive medicines are not yet on the government's "positive list."

The clock is ticking, as the two sides are eager to sign a deal by the end of March at the latest to allow the U.S. Congress to vote on it without amendments under U.S. President George W. Bush's "fast-track" trade promotion authority, which expires June 30. The authority requires a 90-day review of a deal by Congress.

South Korean officials said they will continue to try to keep rice, one of the most sensitive items for them, from the talks, but the U.S. insists that there would be no exception.

The mood in Montana generally subdued, partly because of South Korea's recent decision to turn back two shipments of U.S. beef after bone fragments were found in the meat in violation of the agreement under which Seoul resumed American beef imports after a three-year ban.

South Korea banned U.S. beef imports in late 2003 after a case of mad cow disease was found in the U.S. Before the ban, South Korea's was the third largest U.S. beef market, with annual purchases reaching about US$850 million.

The beef row drew media attention in Montana, the second-largest beef producers among U.S. states. U.S. officials warned that the beef spat could spoil the proposed FTA but South Koreans insisted that it is basically a quarantine issue that is not on the negotiating table.

"In terms of tariff concession talks on industrial goods, I think the attitude of the U.S. side is better than the Jeju round," Lee Hye-min, deputy chief of the Korean delegation, said referring to the fourth round held in South Korea's southern resort island of Jeju in early November.

Analysts say that this round of talks, which will continue until Friday, will determine whether the proposed Seoul-Washington FTA can be reached in time for a U.S. congressional vote.

The mood of the U.S. delegation was "mixed," according to Stephen Norton, a spokesman for the U.S. trade representative.

"It depends on the negotiating group. Some are making more progress than others. It is all part of negotiating," Norton said, adding that U.S. officials "have to remain hopeful because the proposed Korea-U.S. free trade agreement is so important."

South Korean negotiators said they will aggressively pursue the issue of trade remedies in the negotiations. At least one more round is scheduled for January.

South Korean officials believe that many of their high-tech companies, including Samsung Electronics and Hynix Semiconductor, have been unfairly punished under U.S. anti-dumping trade regulations.

The U.S. is South Korea's second largest export market after China. For the U.S., South Korea is its seventh largest trading partner. Two-way trade reached US$72 billion in 2005.

Meanwhile, some 20 South Korean activists held a candlelight rally in this snow-covered ski resort to protest against the free trade talks.

"FTA kills farmers! No to Korea-U.S. FTA," the protesters shouted, with only Korean journalists watching them.

"Signing a free trade agreement with the U.S., the world's largest producer of farm goods, is the death penalty for Korean farmers," Oh Jung-ryol, a representative of the group, said.

Big Sky Resort, Montana, Dec. 5 (Yonhap News)