Prospects for S. Korea-U.S. trade talks in doubt over anti-dumping laws

The U.S. government's refusal to accept South Korean proposals to ease American anti-dumping laws put overall negotiations on a free trade agreement between the two nations in doubt after Seoul apparently failed to win substantial gains in the sensitive area, officials said Thursday.

"We were disappointed that the U.S. side showed no willingness to change its stance on our proposals," said Lee Hye-min, South Korea's deputy top negotiator for the free trade talks. "At this stage, we are viewing the matter with all options open." Easing or changing the U.S. anti-dumping laws is one of the top priorities for South Korea in free trade talks with the world's largest economy. South Korean officials believe America's anti-dumping and countervailing duty rules have been applied unfairly to their products.

On Wednesday night, the U.S. Trade Representative surprised South Korean negotiators by excluding the South Korean proposals on anti-dumping laws from a report to the U.S. Congress. To change trade remedy laws, the administration of U.S. President George W. Bush must submit proposals to Congress by the end of this year.

Despite the U.S. rejection, South Korean officials said they will keep pushing for Washington to loosen the anti-dumping laws in free trade talks that have been already clouded by a spat over imports of the American beef.

"As far as I understand, however, the U.S. side is still leaving the door open to revise its anti-dumping laws," Lee said in a hastily arranged press briefing. "I think there is a possibility for the U.S. to accept our demand if we propose new offers in the trade remedy sector." "It's possible for the U.S. to revise its anti-dumping rules beyond this year," said Lee, a veteran diplomat. "I understand the U.S. side left room for negotiations while not irritating the U.S. Congress." Asked how the U.S. government's refusal will affect the sixth round of talks next month, he declined to give an exact answer, saying, "We are currently in consultation with related government agencies." On the same day, the U.S. Embassy in Seoul said in a brief statement that "new proposals may be tabled in" the trade remedy sector during the sixth round of talks, without elaborating further. Embassy officials weren't immediately available for comment.

In the report to Congress, the U.S. said, "To the extent these proposals could require amendments to (anti-dumping laws), the proposals Korea are currently advancing will not be included in the final agreement." "Negotiations with Korea on all foregoing topics are continuing, and we will continue to consult with the House Ways and Means Committee and the Senate Finance Committee as the negotiations progress." the report said.

South Korean activists accused their government of engaging in "anti-patriotic negotiations and a losing business" with the U.S.

"The U.S. refused to accept our proposals on a trade remedy, leaving us to gain almost nothing from free trade talks with the U.S.," said the Korean Alliance Against the Korea-U.S. FTA in a statement. The group consists of various farm, labor and civic groups.

The use of anti-dumping and countervailing duty laws by the U.S. has raised tariffs on South Korean exports for decades.

According to a May report by the U.S. Congress, five countervailing duties and 18 anti-dumping orders were imposed on South Korean exports, totaling about US$2.5 billion. The affected goods were mostly semiconductors, steel and telecommunications equipment, the report said.

So far, South Korea and the U.S. have held five rounds of free trade talks since June, but no breakthrough has been made to sign an accord by early next year.

At the end of the latest round at a Montana ski resort, Ambassador Kim Jong-hoon, South Korea's top negotiator, said, "If the U.S. side doesn't make concessions on our five-point proposal on trade remedies we won't make concessions on autos and pharmaceuticals." Time is running out, as President Bush's "fast-track" trade promotion authority, allowing a trade deal to be voted by Congress without amendments, expires on July 1.

The authority requires a 90-day presidential notification to Congress, meaning both sides must wrap up negotiations before April 2.

Besides the anti-dumping rules, the sides have barely touched on sensitive issues such as farm goods, autos and pharmaceuticals.

South Korea and the U.S. agreed to hold the next round of talks on Jan. 15-19 at the Shilla Hotel in Seoul, Lee said.

Seoul, Dec. 28 (Yonhap News)