- The Washington Times - Wednesday, December 6, 2006

ASSOCIATED PRESS

Efforts to complete a free-trade agreement between the United States and South Korea hit an impasse yesterday, with South Korea suspending efforts to reach agreement in two critical areas.

The South Korea delegation, being led by South Korean Ambassador Kim Jong-hoon, said it was halting work regarding rules the United States uses to protect domestic producers from a surge in imports of foreign products and regarding patent protections for U.S. pharmaceutical companies.

Assistant U.S. Trade Representative Wendy Cutler, who is heading the U.S. negotiating team, called the South Korean action “unreasonable.”

The development is the latest setback in President Bush’s trade agenda that has featured negotiations on a number of free-trade agreements, most with small countries with limited trade with the United States.

A free-trade deal with South Korea would be the biggest economically for the United States since Mexico joined the United States and Canada in the North American Free Trade Act in 1993. South Korea has the world’s 10th-largest economy.

Mrs. Cutler said the suspension of talks on U.S. rules governing imposition of penalty tariffs on foreign products being sold at unfairly low prices in this country — a practice known as dumping — occurred after American negotiators refused to agree to a package of proposals submitted by South Korea.

“Korea presented us with a list of specific proposals and presented them as all or nothing, take it or leave it,” she told reporters in Washington during a conference call. “We believe this is an unreasonable request particularly since this is the most sensitive area for the United States in these negotiations.”

The negotiations, which began in June, were originally scheduled to wrap up by December but have been extended into next year because of the lack of progress in a number of areas.

Mrs. Cutler said she still thinks negotiations can be completed by early next year, a deadline that must be met for the agreement to be presented to Congress before Mr. Bush loses his authority to negotiate such deals under an expedited process known as “trade promotion authority.”

Under that process, Congress can only vote yes or no to deals, with no amendments.

She said talks in 14 other areas were continuing, and she planned to discuss with Mr. Kim ways to restart talks in the two suspended areas before the next round of talks, which will occur in January in South Korea. Current discussions will wrap up tomorrow.

This week’s talks were being held at a ski resort in Big Sky, Mont., at the invitation of Sen. Max Baucus, Montana Democrat, a big supporter of reaching a free-trade agreement with South Korea. But he told reporters earlier in the week he could not support a completed agreement unless Korea stops banning U.S. beef.

South Korea announced yesterday that it had blocked a third shipment of U.S. beef because it found bone fragments in the meat.

U.S. Agriculture Secretary Mike Johanns said the rejection “clearly illustrates that South Korean officials are determined to find an excuse to reject all beef products from the United States.”

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