[Ip-health] Hankyoreh: Seoul, Washington differ in approach to preliminary free trade talks

[Mike Palmedo]

http://english.hani.co.kr/arti/english_edition/e_business/140381.html

Seoul, Washington differ in approach to preliminary free trade talks -
U.S. probes each individual market while S.K. prefers to 'bundle' its offer=
s

The Hankyoreh
July 11, 2006

The second round of negotiations on a free trade agreement (FTA) between
Korea and the United States began July 10 in Seoul, with the U.S.
maintaining it would not accept Korean demands that products produced at
the Gaeseong (Kaesong) industrial park in North Korea be recognized as
made in the Republic of Korea. U.S. negotiators also maintained their
stance that rice would be included in future market openings, against
the wishes of worried South Korean farmers and workers in that industry.

During an interview at the Shilla Hotel in Seoul, where this latest
round of negotiations is taking place, chief U.S. negotiator Wendy
Cutler said that she expects each side to exchange offers right up until
the third round of negotiations, which are scheduled for September. In
this way, both sides would clearly determine the direction of the
proposals, such as details on phases of tariff removal, before formal
offers are exchanged.

However, this negotiating tactic runs counter to Korea=92s desired
strategy of exchanging proposals on sensitive areas lumped together
within larger offers, and then later exchanging further offers as the
negotiations progress. Korea has several markets it is not eager to
open, including rice, so its bargaining power would be weakened if the
number of concessions are determined before the "true" negotiations begin.

On July 7, top Korean negotiator to the FTA talks Kim Jong-hoon said
that even if the basic principles of each side=92s proposals cannot be
determined, South Korea and the U.S. can still exchange offers as each
sees fit.

Cutler said she understands that rice is a very sensitive subject in
Korea, but maintained that her team would continue to work for market
accessibility for American rice. She also demanded the removal of the
current 8 percent automobile tariff and changes in the automobile tax,
which is currently based on engine displacement size. She expressed
concern about Korea=92s current system for determining pharmaceutical
prices and, in reference to Gaesong, said that an FTA between Korea and
the U.S. covers only products made in each of those countries. All are
controversial issues in South Korea.

Culter said the U.S. has "no interest" in entering Korea=92s mainstream
education market. Instead, Cutler said, it is interested in providing
education services via the internet as well as services relating to the
main U.S. college entrance exam, the Scholastic Aptitude Test (SAT). If
Korea opens its education market, American schools will be able to offer
long-distance educational services without having to establish campuses
in Korea.