South Korea and the U.S. are set to start a new round of free trade talks in Seoul on Monday that experts say could help gauge whether they can reach a deal in time to open their economies to each other.
Outwardly, the mood is subdued with little sign of a breakthrough expected in this week's round, the sixth since June last year. They have already decided to skip official discussions on such key pending issues as anti-dumping rules, autos and beef.
They even "tentatively" decided to hold another round in February.
But many experts warn against being overly pessimistic, saying that real give-and-take may be made in backroom negotiations. In fact, South Korean officials confirmed that key disputes will be tackled at informal top-level contacts.
"In free trade negotiations, the thorniest problems are often left until the end of the talks," Cheong In-kyo, an economics professor at Inha University, said.
Assistant U.S. Trade Representative Wendy Cutler, the chief U.S. negotiator in free trade talks with South Korea, arrived at Incheon International Airport late Sunday amid heavy security.
Upon her arrival, Cutler told reporters that she expects the sixth round to be "productive." At the airport, a dozen activists opposing the free trade talks held a protest. The demonstrators, including some in cow costumes to symbolize the beef issue, shouted "No! FTA." and "Wendy Cutler Go Home!" as the top American negotiator arrived. There was no clash between the activists and police.
Timing presents a huge challenge because the countries must wrap up the talks by the end of March at the latest. U.S. negotiators have until April 2 to present a deal to Congress for an official 90-day review under U.S. President George W. Bush's "fast-track" trade promotion authority.
Bush's authority, which expires on July 1, requires the Congress to vote for or against a deal without amendments.
During the five-day talks in Seoul, South Korea and the U.S. will focus on "less sensitive" areas such as a phase-out of tariffs on industrial goods, competition and intellectual property rights, the Ministry of Foreign Affairs and Trade said in a report to the National Assembly on Saturday.
Citing Washington's refusal to address its key demand to remove or ease its anti-dumping rules, the report said South Korea will refuse official discussions on autos, medicine and other issues of U.S. concern in Seoul.
The report said, however, that those disputes will continue to be discussed at informal contacts between the two top negotiators, Kim Jong-hoon from South Korea and Cutler from the U.S.
The Inha University professor, Cheong, and other experts said that the South Korean decision to suspend discussions on autos and other key disputes may be part of its tactics to win more concessions from the U.S.
South Korean officials said there also will be no formal discussions on quarantine disputes touched off by strict South Korean rules on U.S. beef imports, an issue that has sparked strong protests from Washington.
South Koreans are especially upset by Washington's refusal to ease its anti-dumping rules which they believe have been unfairly used to block semiconductors and other high-tech Korean imports.
"South Korea is getting the short end of the bargain in anti-dumping laws, so what benefits will South Korea get from free trade talks with the U.S.?" Hanshin University professor Lee Hae-young said in a report by Seoul's Hankyoreh newspaper last week.
The U.S. is equally upset by South Korea's repeated rejection of U.S. beef imports after bone fragments were found in them, in violation of an agreement under which Seoul agreed to resume imports after a three-year ban prompted by a mad cow case in the U.S.
South Korean officials said their decision to turn back U.S. beef shipments is purely for health reasons but U.S. officials protested, warning that the Congress would not vote for a trade deal with South Korea without a full opening of its beef market.
Scientists say that mad cow disease can be transmitted to humans through bone marrow of cows infected with the deadly disease.
Also looming as a potential deal-breaker is South Korea's refusal to open its rice market. The U.S. insists there should be no exception under the proposed free trade agreement. The sides haven't formally discussed rice so far.
Rice, the staple for 48.5 million South Koreans, is the most sensitive of all for the Seoul government. Farmers have frequently staged violent protests against the negotiations.
South Korea, Asia's third-largest economy, is Washington's seventh-biggest trading partner. In 2006, the U.S. was South Korea's third-largest market, with two-way trade totaling US$74 billion.
South Korea imposes an average tariff of 11.2 percent on U.S. imports, while the U.S. applies an average 3.7 percent tariff, a U.S. Congress report showed. On agricultural goods, Seoul's average tariff is 52 percent, while the U.S. average is 12 percent.
The envisaged Seoul-Washington free trade agreement is aimed at gradually reducing each other's tariff to zero. If successful, it would be the biggest for the U.S. since the North American Free Trade Agreement (NAFTA) in 1994.
The South Korean government plans to deploy 15,000 police to shield the venue of this week's talks against possible violent protests by farmers and other anti-globalization activists.
Incheon/Seoul, Jan. 14 (Yonhap News)
Few hopeful signs emerge ahead of new round of Seoul-Washington trade talks |
