U.S.-South Korea trade talks hang in the balance

By Jeremy Laurence

SEOUL (BestGrowthStock) – U.S. and South Korean trade officials were tight-lipped on Wednesday about the fate of a long-stalled free trade deal just hours before a deadline to resolve outstanding issues on beef and autos.

Officials from both countries refused to comment on the talks, leaving it to President Barack Obama and his South Korean counterpart, Lee Myung-bak, who meet in Seoul on Thursday on the sidelines of a G20 summit, to deliver the news.

Lee and Obama agreed last week in a telephone call that it would be in their countries’ interests to conclude the trade deal soon, so their assemblies can enact it into law.

South Korean Minister for Trade Kim Jong-hoon and U.S. Trade Representative Ron Kirk extended talks into a third day on Wednesday in an attempt to resolve industry concerns holding up approval by the U.S. Congress.

A Trade Ministry official refused to say how Wednesday’s talks went. Wednesday’s media conference was canceled, and there were no plans to hold further briefings, she said.

The deal, which was signed in 2007, has been criticized in the United States for not doing enough to open South Korean markets to U.S. cars and beef.

A failure to resolve differences could embarrass Obama who, coming off a mid-term election setback last week, hoped to advance the pact and send a signal on U.S. commitment to greater trade.

But many of Obama’s fellow Democrats are demanding substantial changes to the pact, especially in the auto provisions, to open Korea’s market to more American exports while protecting American workers against a surge in imports.

BEEF STEWS

While the main sticking point has been cars, a senior South Korean government official was quoted by local media as saying on Wednesday that beef was now also proving troublesome.

Yonhap news agency quoted the official as saying Seoul would risk indefinitely delaying the conclusion of the FTA if Washington insisted on an “unacceptable” demand that Seoul opened its market wider to U.S. beef.

The U.S. is putting strong pressure on South Korea to discuss the beef issue, but Seoul remains firm in its position that it is not negotiable, the official said.

Beef is a potentially explosive issue for Lee’s conservative government and the ruling Grand National Party, which has broad support for the free trade deal.

Some South Korean media had reported Washington was dropping the beef issue to win concessions from Seoul on autos.

The two sides agreed to a “voluntary private sector” arrangement in 2008 allowing South Korea to import U.S. beef from cattle less than 30 months old, considered the safest from mad cow disease. Some U.S. lawmakers want South Korea to accept all beef irrespective of cattle age.

On Tuesday, South Korea said discussions had centered on U.S. concerns that the deal signed three years ago did not do enough to ensure access to South Korea’s auto market for U.S. manufacturers.

Washington has said South Korea’s auto standards discriminate against American cars and act as non-tariff barriers, keeping their market share at less than 1 percent.

(Additional reporting by Jack Kim in Seoul and Doug Palmer in Washington; Editing by Nick Macfie)

U.S.-South Korea trade talks hang in the balance