US-South Korea International Trade Talks Threatened by Looming Deadline

The US had warned that its on-going free trade agreement (FTA) talks with South Korea were "not going well." The two countries have been racing against time in order to reach an international trade deal. It is very important for the two parties to complete their international trade negotiations before the trade promotion authority of President George W. Bush ends in July this year. The proposed FTA has been aimed at boosting bilateral trade between the US and South Korea by up to $20 billion.

Although the US and South Korea had completed several rounds of FTA talks, the two countries still need to iron out certain issues in order to reach an international trade agreement. It is significant for the two sides to conclude their negotiations before the expiration of Mr. Bush's TPA. This would spare the proposed FTA from being changed by the US Congress during the approval process. It must be noted that Mr. Bush and his South Korean counterpart Roh Moo-hyun talked about the proposed FTA through phone on Thursday last week. During the conversation, the two leaders vowed their commitment to the FTA talks.

Yoon Seung-yong, who is the spokesman of South Korea's president, stated that the two leaders agreed to intensify their efforts in order to reach an international trade deal. According to him, both Mr. Bush and Mr. Moo-hyun exchanged ideas regarding remaining issues affecting the progress of the FTA negotiations. Differences over the textile, agriculture, and automobile sectors are among the key issues that must be resolved by the two parties. After negotiating during the last ten months, the US and South Korea were only able to reach a consensus on three areas out of the 17 sectors included in the proposed FTA.

Although Deputy US Trade Representative Karan Bhatia and South Korea Trade Minister Kim Hyun-chong tried to settle the differences between their countries, they have not been able to make a significant breakthrough in the key issues mentioned above. If the proposed international trade pact materialized, it would be the biggest free trade agreement to be signed by the US since the NAFTA (North American Free Trade Agreement) in 1993. The FTA is expected to boost trade between the two countries. While it would strengthen the presence of the US in Asia, it would enable South Korea to gain a greater access into US markets. The proposed international trade pact is expected to boost the US-South Korea trade by up to 420 billion.