[Ip-health] Bridges Weekly: US AND KOREA HOLD FIRST ROUND OF FTA TALKS

[Thiru Balasubramaniam]

<SNIP>

Korea's pricing and reimbursement policies for prescription drugs are
another sticking point. Assistant US Trade Representative Wendy Cutler
expressed "grave concern" over new Korean draft regulations that do not
guarantee that the national insurer will reimburse patients for
purchases of imported drugs. Some Korean officials expressed concern
that US demands on pharmaceutical patents and pricing would increase
drug prices and insurance costs.

Seoul wants a deal to cover goods produced at the South Korean-owned
Kaesong Industrial Complex in North Korea, which it considers an
important component of bilateral economic cooperation. Washington, which
imposes economic sanctions on North Korea, opposes this, suggesting that
the "FTA should cover the Republic of Korea and the US."



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US AND KOREA HOLD FIRST ROUND OF FTA TALKS

The US and South Korea wrapped up the first round of comprehensive free
trade agreement (FTA) negotiations on 9 June, with disagreements over
issues including pharmaceuticals, agriculture, and goods produced in a
North Korean industrial park. The prospective deal has been hailed as
the US' biggest since the North American Free Trade Agreement (NAFTA) in
1994.

While senior officials from both sides expressed cautious optimism, an
uphill struggle remains. One of the most sensitive issues is the
phase-out of Korea's agriculture tariffs, which average 52 percent,
compared to 12 percent in the US. Korean farm unions have warned that
tariff cuts would have dire consequences for farming households. At the
same time, US farmers are seeking access for beef products, which were
banned from Korea following a mad cow disease scare.

Korea's pricing and reimbursement policies for prescription drugs are
another sticking point. Assistant US Trade Representative Wendy Cutler
expressed "grave concern" over new Korean draft regulations that do not
guarantee that the national insurer will reimburse patients for
purchases of imported drugs. Some Korean officials expressed concern
that US demands on pharmaceutical patents and pricing would increase
drug prices and insurance costs.

Seoul wants a deal to cover goods produced at the South Korean-owned
Kaesong Industrial Complex in North Korea, which it considers an
important component of bilateral economic cooperation. Washington, which
imposes economic sanctions on North Korea, opposes this, suggesting that
the "FTA should cover the Republic of Korea and the US."

Nevertheless, new US Trade Representative Susan Schwab said that the
negotiations were progressing "at a far faster pace than some of our
other FTAs in the past."

In order to complete the deal before the Bush administration's
'fast-track' authority to negotiate trade pacts expires in July 2007,
the two countries must reach an accord by March. The next round of talks
is expected in Seoul in July.

"South Korea US Makes Progress in FTA Talks, With Partial Concerns,"
FINANCIAL TIMES INFORMATION, 11 June 2006; "Korea trade talks off to a
fast start, US says," REUTERS, 9 June 2006; "US and South Korea Open
High-Stakes Talks," INTERNATIONAL HERALD TRIBUNE, 6 June 2006;
"Statements at a Press Conference Challenging the US-Korean Free Trade
Agreement," THE OAKLAND INSTITUTE, 7 June 2006; "Ministry Fears Effects
of FTA on healthcare system," THE HANKYOREH, 6 June 2006; "Bumpy Road
for US-Korea Talks," ASIA TIMES, 3 June 2006; "US Lauds Progress in
First Week of South Korea Trade Talks," AGENCE FRANCE PRESSE, 9 June 2006.