Gov’t braces for U.S. FTA talks

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Gov’t braces for U.S. FTA talks

The government said Monday that it expects the United States to demand fewer non-tariff barriers for its automobile exports to Korea as the countries discuss changes to their free trade agreement (FTA).

But it is not yet clear whether Washington wants a partial revision or a complete renegotiation.

“In particular, the U.S. is interested in terminating non-tariff barriers for automobiles,” said the Trade Ministry in a report submitted to the National Assembly’s industry and trade committee, wrapping up domestic procedures before officially discussing changes to the five year-old pact.

Korea’s automobile sector has been highlighted as one industry that benefited from the bilateral agreement. While tariffs on American automobiles have been withdrawn, Seoul imposes a non-tariff barrier on U.S. vehicles with high CO2 emission levels. Washington argues that Korea apples an overly rigorous emission standard as a way of keeping American cars out of the market.

If Seoul makes major concessions to U.S. demands to widen its agricultural market, Korean farmers would be unhappy.

With the implementation of the Korus FTA in March 2012, the government immediately lifted tariffs on 578 U.S. agricultural products while agreeing to lift tariffs on another 1,499 products over a period of two to 20 years. For 118 products, including U.S. beef, Seoul decided to lift tariffs over a 15-year-period.

An estimated 545 U.S. farm products still have import tariffs. The United States could demand cutting that number.

The two sides are expected to decide on dates and venues for the talks in coming weeks.

Trade Minister Kim Hyun-chong told lawmakers at a parliamentary committee meeting that he believes the Trump administration wants partial revisions to the FTA. “We are not ruling out the possibility that the partial revision process will be shifted into a full renegotiation during the talks,” he said.

For the first 11 months of this year, Korea’s trade surplus with the United States stood at $17 billion, down 21.6 percent from $21.69 billion in the same period last year, according to Korea’s Trade Ministry.

Last year, Korea saw its trade surplus with the United States more than double to $23.25 billion in from $11.64 billion in 2011, the year before the free trade agreement went into force.

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