U.S., S. Korea working toward a trade accord

The United States and South Korea started working this week on a free-trade agreement, potentially the biggest trade deal since NAFTA.

The two sides are under a tight deadline to resolve a series of sensitive and complex issues.

U.S. negotiators will press the Asian nation to lift barriers to U.S. agriculture, pharmaceuticals and automobiles. South Korea, meanwhile, wants the United States to grant trade benefits to products from a South Korean-operated industrial park in North Korean territory, and to loosen travel restrictions.

The Bush administration hopes to wrap up talks by year’s end, before congressionally authorized trade-promotion authority expires.

The authority allows the White House to negotiate deals without congressional interference through mid-2007, but any deal would need to reach Capitol Hill by early next year.

“I remain optimistic about our ability to conclude a high-quality, comprehensive agreement,” said Wendy Cutler, chief U.S. negotiator. “The political will is clearly there on both sides.”

The United States and South Korea last year traded $71.45 billion in goods, making the Asian nation the seventh-biggest U.S. trade partner. A U.S.-South Korean deal would have the largest economic effect of any free-trade agreement since Congress approved the North American Free Trade Agreement, with Canada and Mexico, in 1993.

U.S. trade with Canada totaled $499 billion last year, and trade with Mexico reached $290 billion.

The Bush administration wants to open one of Asia’s largest markets to U.S. fruits, vegetables, rice, beef and other farm goods, as well as industrial and service companies.

South Korea has high tariffs, tight quotas and sanitary regulations that limit U.S. farm exports. U.S. beef is banned outright. Other regulations and taxes help block U.S. vehicles, pharmaceuticals and services from the market.

“Clearly this is very important for our companies. We can’t rush to get a final agreement,” said Myron Brilliant, vice president for East Asia at the U.S. Chamber of Commerce.

South Korea has made inroads into the U.S. market with its autos, semiconductors, televisions and other goods, but it wants a deal that will lock in or lower tariff rates and includes exports from the Kaesong industrial park in communist North Korea.

In February, Rob Portman, who was U.S. trade representative, said only goods made in South Korea would be included in the pact.

In separate negotiations, Koreans are asking the White House to waive visa requirements for tourists. It is a politically sensitive issue in Seoul.

The Bush administration next week will start free-trade negotiations with Malaysia, the 10th-biggest U.S. trade partner, as part of a larger effort to cement trade ties in Asia and counter China’s growing clout in the region.

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