[Ip-health] Korea, U.S. at Odds on Two-Thirds of Free-Trade Agenda

[Mike Palmedo]

http://english.chosun.com/w21data/html/news/200606/200606080022.html

Korea, U.S. at Odds on Two-Thirds of Free-Trade Agenda

Digital Chosunilbo
June 8, 2006

Seoul and Washington have failed to narrow their differences on some 60
percent of items on the agenda at their first round of free-trade talks
in Washington. The talks started Monday.

The two sides were unable to come up with a common formula in
agriculture and sanitary and phytosanitary issues, and there is tough
going ahead when the issues come up again in the next round. The two
sides lay down their agreements -- as well as areas where they cannot
agree ? point by point in a consolidated text.

=93The consolidate text will show agreement on some 40 percent of the
issues discussed,=94 Korea=92s top negotiator Kim Jong-hoon told reporters
after the third day of talks Wednesday,

Divergent viewpoints will be recorded for the rest and carried over into
the next round in Seoul in July.

? Bones of Contention

The two sides failed to agree on agriculture, sanitary and phytosanitary
issues, goods produced in the inter-Korean Kaesong Industrial Complex,
as well as textiles, cars and pharmaceuticals.

The crux in the agricultural sector is whether safeguards or emergency
import restrictions can be maintained. Korea wants them to ensure
minimal protection for its agricultural industry, but the U.S. has made
clear it wants all restrictions scrapped.

Washington is also rejecting Korean demands to include goods from the
Kaesong Complex in the North. But Washington, which is engaged in a
drawn-out standoff with Pyongyang, insists the free-trade agreement will
be strictly between it and South Korea. Meanwhile, Seoul is pushing for
lower U.S. tariffs on textiles but has failed to get a clear answer from
the U.S.

The U.S, also wants a permanent committee to consult on trade so
sanitary and phytosanitary issues do not hamper the sector. Korea sees
no need for such a committee.

? Expectations

Washington wants Korea to base its car tax on price or fuel efficiency,
not on engine displacement, a move it hopes would boost sales of the big
gas-guzzling cars made in the U.S. But Seoul says FTA talks are not the
place to talk about tax matters.

When the U.S. raised the issue of increasing prices of new U.S.-made
pharmaceuticals in the Korean market, Korea merely promised a
=93comprehensive review=94 of what impact that would have on its medical sy=
stem.

Hoewever, a Korean official was upbeat. =93Both sides are trying to take
the offensive, which is why we are so far apart on many issues, but
these conflicts will be resolved smoothly in future negotiations,=94 the
official said. The two countries will start the second round of FTA
talks in Seoul on July 10.