Time running out for South Korea-US FTA

Seoul, September 25:

Time is running out for South Korea and the United States to reach agreement on a free trade deal, a former top aide to US President George W Bush said on Monday.

The two sides began negotiating in June on what would be the largest such accord for the US since the North American Free Trade Agreement, but little progress has been reported.

“That free trade agreement is critically important to both countries and time is the essence,” Andrew Card, a former White House chief of staff, said in a speech to a forum in Seoul.

“The time is right for negotiators to sit with all due responsibility and understanding so that the United States Congress can consider that agreement before the trade promotion authority expires next summer.” Bush’s trade promotion authority, allowing him to fast-track trade accords through Congress, expires in June 2007.

“I am somewhat pessimistic that the trade promotion authority will be extended,” he said in answer to a question from the audience. The two sides this month completed a third round of negotiations in Seattle and a fourth round will be held in South Korea next month.

Assistant US Trade Representative Wendy Cutler said after the Seattle talks that the fourth round would have to show more progress if a pact is to be reached by the end of the year.

She described South Korea’s offer in agriculture as particularly disappointing.

The two sides also differ on Seoul’s desire for Washington to treat goods produced in Kaesong, a South Korean-built industrial site in North Korea, as South Korean-made.

The United States has so far resisted the request.

“The Kaesong zone is not in the Republic of Korea (South Korea),” Theodore Kassinger, former US deputy commerce secretary for Bush, told the forum. But he said the issue was still on the table for discussions.

Seoul, which pushes for rapprochement with Pyongyang, hopes to make the Kaesong industrial site a development model that combines South Korea’s capital and North Korea’s cheap labor.

Currently only 15 South Korean firms operate in Kaesong but South Korean officials hope that low costs will draw some 3,000 factories by 2024.

South Korea is the seventh largest trading partner and seventh largest export market for the United States. Two-way trade was valued at $72 billion in 2005, according to US figures. The United States is South Korea’s second largest trading partner after giant neighbour China but the largest source of foreign direct investment.