South Korea-U.S race for deal in heated farm trade

SEOUL, Mar 19 (Reuters) South Korea and the United States started talks on Monday to reach last-minute compromises in their fractious farm trade and meet an end-month deadline for what would be the biggest U.S. trade deal in 15 years.

Last week, the two reached agreements in their free trade talks in some sectors and came close to deals in others. But the most heated areas, such as cars and farm trade, were left to be hammered out in high-level meetings over the next two weeks.

In their agriculture talks scheduled to run through Wednesday in Seoul, the United States will push for greater access for its beef exports into South Korea while Seoul will push to keep U.S. rice and other farm products out of the deal.

''Both sides will narrow differences over what should be included in the list of sensitive agriculture items in the free trade agreement,'' Min Dong-seok, deputy minister at the agriculture ministry, said in a radio interview.

Min reiterated South Korea's position that rice should not be on the table in the trade deal with the United States.

South Korea reached a separate deal under the auspices of the World Trade Organisation with nine rice exporting countries, including the United States, where Seoul would be allowed to gradually open its markets to imports in exchange for putting foreign rice on the market for its consumers.

Under the 2004 deal, Seoul was obliged to sell 22,557 tonnes of imported rice directly to its consumers in 2005. The volume is expected to increase to 122,610 tonnes by 2014.

In return, South Korea received a 10-year grace period for easing up on its market protection measures.

Negotiators from both sides have said they believe they could reach a comprehensive trade deal before the deadline.

The deal, which studies said could add about billion to their annual .5 billion in trade, needs to be wrapped up by the end of the month to meet provisions of a U.S. trade law that allows the White House to negotiate pacts lawmakers can reject but not amend.

Other key sticking points include U.S. demands to further open the South Korean market for its cars and South Korean calls to change U.S. anti-dumping laws Seoul says are unfairly applied to its products.

The deal could be the biggest U.S. free trade pact since the North America Free Trade Agreement of 1992. South Korea is the seventh-largest trading partner of the United States while the United States is Seoul's third-largest trade partner.

REUTERS SBA PM0805