After six months of talks, FTA deal still not certain

A little less than a year ago, on Feb. 3, the government announced a plan. At Korea’s request, it would start negotiations with the United States on a free trade agreement. Under a fast track arrangement, both sides planned to conclude a deal by March 2007.

A free trade agreement between Korea and the United States would upgrade the efficiency of the Korean economy, the government said. Farmers, union workers and others strongly disagreed, and protested often, sometimes violently. They said a trade agreement would ruin the economy and that the government was acting too quickly. The anti-trade group said Korea’s government was not properly prepared for such an important deal that could change the country’s destiny. The first round of talks began on June 5, focusing on 17 areas, including agriculture, service and trade remedies. The road to an agreement has been rocky for both sides. Negotiators from Korea and the United States, numbering 200 and 80 respectively, sometimes smiled and shared ideas, but other times stormed out of the meeting rooms. During the second round in July, negotiators from the United States became enraged over South Korea’s decision to change its drug reimbursement policy to include only medications it designated for coverage, a so-called “positive system.” The Americans complained that the change was suggested just as the trade talks were about to begin. The U.S. delegates boycotted the session, ending the round of talks a day earlier than planned. The fourth round, in October, was not completed smoothly because the Koreans said the United States did not give them the proper answers about early tax exemptions on industrial products. In the fifth round last month in Montana, talks on trade remedies, pharmaceuticals and automobiles were suspended by the Korean delegation. They were not happy when negotiators from the United States failed to accept or decline Korea’s demand to amend certain trade remedies. Some progress, however, was made. Both sides decided to introduce a safeguard system to prevent a sudden rush of imported goods and temporary tariffs. They also agreed that professional licenses earned in the other country may be recognized at home. Potential obstacles that lie ahead include the U.S. negotiators’ insistence on discussing inspection procedures related to beef imports. Moreover, the U.S. negotiators filed a mandatory report to Congress late Wednesday Korea time, saying, that some “proposals Korea are currently advancing will not be included in the final agreement,” because U.S. laws would need to be changed. And even if a deal is reached, there is no guarantee the Korean National Assembly and the U.S. Congress will approve the FTA. The sixth round is scheduled to take place in Seoul, two weeks from today, from Jan. 15-19. The two sides know what the other wants and are ready to make small sacrifices, some negotiators said. “We can not take all. The talks are a deal. In a deal you have some give and take. We may lose some, but will gain more,” said Kim Jong-hoon, chief negotiator for Korea at a year-end party with media last month. The United States also plans to try to speed up the talks by sacrificing some demands as the deadline nears. According to a report from the Congressional Research Service that came out a week earlier, negotiations need to be done by April 2 in order to get approval from Congress. “Of course some industries may lose from opening the market through a free trade agreement, I understand. But, the big flow of free trade is inevitable,” Mr. Kim said. by Hwang Young-jin