S.Korea, US reach last-minute free trade deal
Updated: 2007-04-02 13:44
SEOUL - The United States and
South Korea agreed the biggest U.S. trade pact for 15 years on Monday with only
minutes to go before a deadline.
People participate in a protest
outside a hospital in Seoul April 1, 2007, where Heo Se-wook, the man who
set himself ablaze in front of the venue for the South Korea-U.S. free
trade agreement (FTA) talks, receives medical treatment. According to a
local media, Heo, a member of the Korean Federation of Taxi Workers'
Unions, set himself ablaze on Sunday as he shouted slogans like "Stop FTA
and Resign President Roh Moo-hyun!". The posters read, "Get together! In
front of the city hall at 7pm on April 1". [Reuters]
The deal came after nine months of
negotiations and sometimes violent protests in South Korea, mostly over fears
that the country's heavily subsidised farmers could not survive a flood of
cheaper U.S. farm products.
Seoul agreed in the end to phase out its 40
percent tariff on U.S. beef over 15 years, but it was not immediately clear how
much the two sides had conceded on other issues and whether South Korea's
long-protected rice market would be opened up.
"We expect the FTA (free
trade agreement) to provide a springboard for our economy to leap to an advanced
economy," a press official quoted President Roh Moo-Hyun as saying.
deal between the United States and Asia's third-largest economy was struck just
minutes before time ran out for the White House to use legislation allowing it
to present a deal to Congress that can be rejected or accepted, but not changed.
Some estimates say an agreement could add $20 billion to the already
more than $70 billion of two-way trade each year.
U.S. President George
W. Bush, in a letter to Congress released by the White House, said agreement
would bring export opportunities for a range of U.S. businesses, promote
economic growth and provide jobs.
"(It) will also further enhance the
strong United States-Korea partnership, which has served as a force for
stability and prosperity in Asia," he said.
Much of the final bargaining focused on whether the
parties could concede enough to each other on farm goods and cars, with both
sides seeking lower tariff and other barriers to auto imports.
United States also wanted greater access to South Korea's lucrative financial
services, including insurance, while Seoul pressed Washington to change
anti-dumping laws it says are unfairly applied to its products.
Expectations that the two sides would strike a deal helped boost South
Korea's stock market to a five-week high, especially auto stocks, which are seen
as benefitting from greater access to the U.S. market.
wake up and restructure and are reborn to compete more globally, that's good for
the companies that survive and to their shareholders," said Thomas Choi, head of
research at PCA Asset Management.
Negotiators had seemed on the verge of
a deal after Bush and Roh agreed last week to instruct negotiators to be
But last-minute haggling meant missing two self-imposed
deadlines over the weekend.
The trade agreement had to be with Congress
by the end of Sunday Washington time (0400 GMT) if it was to meet the 90-day
required notice period. If they had missed that, talks would likely have dragged
on for years.
|Most Commented/Read Stories in 48 Hours