South Korea and US inch close to trade deal

Seoul, Mar 29: South Korea and the United States look set to seal the biggest US trade pact in 15 years this weekend as both sides strive for compromise over heavily protected goods such as rice and cars.

The Yonhap news agency quoted a South Korean negotiator today as saying that both sides were committed to meeting a March 31 deadline for a deal, which some estimate could boost the nearly 72 billion dollar annual two-way trade by an extra billion.

''At this stage, it's hard to say the substance but there is no doubt that we will reach a deal in time,'' the unnamed negotiator was quoted as saying.

South Korean President Roh Moo-hyun had earlier said he was committed to meeting the deadline, which would allow the White House to approve the agreement under its fast-track negotiating authority, which expires at the end of June.

''As we have succeeded whenever we opened up, now is the era of free trade agreements,'' the presidential office quoted Roh as saying during a visit to the Middle East.

''We are trying to get the best (deal) possible, but a deal needs to have the right mix of gains and losses ... We still can't be confidently optimistic or pessimistic.'' South Korea has said U.S. demands to further open its heavily defended rice market could trip up an agreement, but a Korean farm ministry spokesman said on Thursday that both sides wanted a deal.

''Both sides clearly have a view that the deal should be reached in time,'' said Lee Chang-bum.

South Korean Trade Minister Kim Hyun-chong and Deputy US Trade Representative Karan Bhatia have been holding last-ditch talks in a Seoul hotel since Monday.

Officials on both sides have said that negotiations could drag on for years if they miss the March 31 deadline.

Wrangling Over Rice:

Many South Korean companies and more reform-minded bureaucrats see the pact lowering prices and opening up South Korea to greater competition, which will promote higher standards in Asia's third-largest economy.

After the senior envoys finish their discussions in Seoul, Roh and US President George W Bush will speak by phone to conclude the negotiations, officials said.

The negotiations have been accompanied in the past year by mass protests, focusing on protecting farmers, often leading to bloodshed.

However, one newspaper poll showed that more than half of the national assembly would support a deal.

Critics point out that domestic prices of rice are some four times that on the international market while foreign cars remain a rare sight on Seoul's congested roads.

The United States wants South Korea to reduce tariffs on car imports and cut barriers it sees as blocking sales. It has called for greater access for its pharmaceutical products and progress on a separate dispute about access for US beef.

US lawmakers have warned the deal must secure greater access for cars, rice and beef to win congressional approval.

Seoul, on the other hand, has pressed Washington to change anti-dumping laws it says are unfairly applied to its products.

The deal could be the biggest US 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