Troubles abound in US-S Korea trade talks

Big Sky (Mont), Dec 9: The United States and South Korea wrapped up a ''troubling'' round of talks this week on a free trade agreement, despite progress in some areas, negotiators for both countries said.

The two countries clashed over sensitive trade issues on each side, including Korean barriers to auto imports and US anti-dumping duties which South Korea believes are often unfairly applied to its products.

Chief US negotiator Wendy Cutler expressed disappointment with recent South Korean rejections of US beef, and said Seoul's unwillingness to work with the United States on pharmaceutical issues was ''an area of grave concern.'' The lack of progress in the automotive and pharmaceutical negotiations ''is extremely troubling for my government and will certainly be a subject of intense discussions over the coming days and weeks,'' Cutler said.

The two countries are striving to reach a free trade agreement by early next year. It would be the biggest US free trade deal since NAFTA over a decade ago.

The fifth round of talks on the proposed pact was held against the backdrop of a Montana ski resort. A sixth round is set for the week of January 15th in South Korea, and both Cutler and chief Korean negotiator Kim Jong-hoon said a seventh round would probably be needed as well.

''I am aware that Wendy Cutler said she found the lack of progress in autos and pharmaceuticals troubling. I also find it troubling that there has been no progress in trade remedies areas (such as anti-dumping) that Korea is very interested in,'' Kim said, speaking through a translator.

Drugs, Autos and Duties

The United States believes that new Korean regulations aimed at reining in the cost of its national health care system will make it harder for US prescription drug companies to get their products into one of the world's biggest pharmaceutical markets. US companies already felt discriminated against before the new rules were proposed.

Korea's failure to offer any new ideas for opening up its automotive market was disappointing because the United States is determined to level the playing field for the US auto industry in that sector with Korea, Cutler said.

Autos accounted for about two-thirds of the 16 billion US trade deficit with South Korea last year. The Asian manufacturer exported over 730,000 cars to the United States in 2005, while importing about 5,800 US vehicles.

US auto manufacturers and workers charge that Seoul relies on many nontariff barriers to keep out foreign cars. Those include a car tax based on engine size, which they believe discriminates against US-made cars..

Kim told reporters there needed to be progress on anti-dumping rules and other areas of the talks for Korea to make changes to its engine displacement tax.

Reuters