Decision close on US, South Korea trade talks

SEOUL, Apr 2 (Reuters) Exhausted U.S. and South Korean trade officials finished negotiations on Monday and began conferring with their governments on whether to accept a deal on what would be the biggest U.S. trade pact in 15 years.

''We'll know within the hour,'' said U.S. Trade Representative spokesman Stephen Norton.

He said negotiations were over. ''It's a matter now of whether they (the two governments) can say yes or no.'' A stern-faced South Korean minister for trade and the top trade negotiator left the central hotel late in the morning where the talks have been going on for the past week, declining to comment to reporters.

There was local media speculation that they were heading to the presidential Blue House to consult on whether the proposed deal was acceptable.

The United States and Asia's third-largest economy have been negotiating a deal for the past nine months, but final agreement appears to largely hinge on whether they can offer enough concessions to each other on farm goods and autos.

The second self-imposed deadline slipped by at 1 a.m. in Seoul (1600 GMT on Sunday).

Time has almost run out if they are to agree a deal while the White House can still use fast-track trade legislation, that expires on June 30, to negotiate trade pacts Congress may approve or reject but not alter.

The agreement has to be with Congress by the end of Sunday there if it is to meet the 90-day notice period Congress requires.

If they miss that, talks could drag on for years.

South Korean officials have said the most contentious issues were agriculture, including beef and oranges, and autos.

Both sides want the other to lower tariff and other barriers to auto imports. The United States is demanding that South Korea -- whose consumers pay among the world's highest prices for their food -- open its tightly protected farm market American beef imports.

Beef is not strictly part of the negotiations but has become closely linked. South Korea used to be a major market for U.S. beef until Seoul banned imports in 2002 due to a U.S. mad cow disease outbreak.

South Korea said in September it would resume imports provided beef parts it deemed risky, such as bones, were not included.

Min said Seoul had rejected a U.S. demand to put in writing when it will fully clear U.S. beef quarantine issues.

Some estimates say an agreement could add billion to the already more than billion of two-way trade each year.

EARLIER ON VERGE OF DEAL Negotiators had seemed on the verge of signing a deal after Presidents George W. Bush and Roh Moo-hyun agreed last week to instruct their negotiators to be as flexible as possible.

Months of talks have been overshadowed by large and sometimes violent protests in South Korea, mostly over fears that its heavily subsidised farmers could not survive a flood of cheaper U.S. farm products.

South Korean farmers say opening their market would cost them billions of dollars and tens of thousands of jobs.

On automobiles, officials say Washington's demands to change South Korea's tax structure to remove discrimination against American cars would have a much wider impact and could cost the government billions of dollars in lost revenue.

The United States also wants greater access to South Korea's lucrative financial services, including insurance.

Seoul is pressing Washington to change anti-dumping laws it says are unfairly applied to its products. It also wants lower U.S. tariffs on its auto exports there.

Reuters AKJ GC0914