US-ROK free trade talks go to the wire
Hyundai cars wait for export in front of a cargo ship at the port of Ulsan, South Korea. The country's auto industry is expected to benefit from greater access to the US market resulting from the trade pact agreed yesterday between Washington and Seoul. |
In one major surprise, the United States agreed to give, at least in principle, preferential treatment to ROK products made in the Democratic People's Republic of Korea (DPRK).
The deal came after nine months of negotiations and, sometimes, violent protests in the ROK, mostly over fears that the country's heavily subsidised farmers could not survive a flood of cheaper US farm products.
"We expect the ... (agreement) would provide a stepping stone that would catapult (the ROK) into an advanced economy" a press official quoted President Roh Moo-hyun as saying.
US negotiators were equally enthusiastic.
"I'd give it an A-plus," US Chief Negotiator Wendy Cutler told reporters after the agreement.
Seoul agreed in the end to phase out its 40 percent tariff on US beef over 15 years, but did not budge on the most sensitive, and heavily protected, farm product rice.
On another major sticking point, the two agreed to open their markets more to each other's autos.
Last-minute deal
The accord 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.
In the talks' big surprise, the United States agreed in principle to give preferential treatment to certain products from the DPRK. That would accede to the ROK's request that goods it makes in an industrial park just inside the DPRK get similar treatment to those made at home.
The United States had previously balked at the idea following the DPRK's missile and nuclear tests last year.
The agreement comes with conditions, including progress in international talks to end the DPRK's nuclear weapons programme.
US President George W. Bush, in a letter to Congress released by the White House, said the agreement would bring export opportunities for a range of US 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.
Last-minute haggling
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.
The two sides agreed to open up their markets to each other's autos, a move which auto analysts say will largely benefit the ROK.
Expectations that the two sides would strike a deal helped boost the ROK's stock market to a five-week high, especially auto stocks.
"If industries 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 flexible.
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.
Agencies
(China Daily 04/03/2007 page16)
