Progress Made in Korea-U.S. FTA Talks

As the eighth round of Korea-U.S. free trade agreement (FTA) talks come to a close, the two countries reached a full agreement in a series of fields. The two sides agreed to a competition field protocol on March 8 and to government procurement and customs sector protocols over the weekend.

However, it appears that the more controversial agricultural products and auto sectors will be discussed at high-level talks to be held around March 19, as the two countries failed to narrow their differences in both of those sectors.

The two sides came to a full agreement on major sticking points regarding customs at a meeting held yesterday at the Grand Hyatt Hotel in Hannam-dong, Yongsan-gu, Seoul, where they negotiated eight fields. The two countries agreed to simplify customs procedures for export-import cargos and to ban imports manufactured in a third country in a roundabout method.

Representatives of both countries successfully concluded negotiations for government procurement and agreed to open their markets for goods for public institutions to each other.

Concerning the government procurement sector, the two sides agreed that the U.S. would removes state government procurement markets from the list of open market, and that Korea would exclude procurement markets of local governments and public companies from the deal. The school meal market, which has been controversial for some time, will also be excluded from the government procurement sector.

In addition, both of the countries hammered out most of their sticking points except for a plan to open broadcast and communications markets in the service sector. Without going into details, the two countries almost concluded talks on the environment, Technical Barrier to Trade (TBT), Sanitary and PhytoSanitary measures (SPS), electronic commerce, customs and labor fields as well.

At a luncheon held yesterday attended by reporters, Korea’s chief negotiator for the talks, Kim Jong-hoon, said, “We don’t think that the talks will break down. The two countries can strike a deal by the deadline.”

Both countries are likely to engage in a tug of war in the fields of agricultural goods, autos, and textiles by the end of this month (the deadline for the conclusion of the talks) as they still remained at odds in these sectors.

The U.S. suggested a tariff adjustment far below what Korea had expected.

U.S. chief representative Wendy Cutler noted, “The two sides are having difficulty concluding talks in the medicine and trade remedies areas, as well as in the agriculture and auto sectors.”

Chief negotiator Kim stated, “The two countries will negotiate the issue of auto and beef sectors to the end (by the deadline),” and added that two rounds of high-level talks to be attended by chief negotiators and trade ministers of both countries will be held after the eighth round of FTA talks finishes.

Meanwhile, U.S. representatives John Spratt (Democrat) and Howard Coble (Republican) put pressure on the U.S. delegation on March 9 by sending a letter saying, “We are concerned about the great influx of Korean textile products into the U.S. once the Korea-U.S. FTA talks conclude.”

abc@donga.com