S. Korean, U.S. officials to meet on trade deal in May: report

By Hwang Doo-hyong
WASHINGTON, April 19 (Yonhap) -- South Korean and U.S. officials will meet here
next month to discuss ratifying a pending bilateral free trade deal ahead of
South Korean President Lee Myung-bak's U.S. visit in June, a report said Sunday.

The Internet magazine "World Trade Online" quoted informed sources as saying the
two nations will "conduct a review of the bilateral free trade agreement in an
effort to prepare for a meaningful discussion of the FTA between presidents
Barack Obama and Lee Myung-bak in June when Lee visits the United States."
Lee and Obama agreed in London early this month to further discuss the issue in
June to make progress towards ratification.
At the time, the two leaders said the deal would be beneficial to both countries
and stressed the importance of avoiding protectionism and economic nationalism.
Seoul and Washington signed the trade deal, known as the KORUS FTA, in June 2007,
but it has yet to be ratified by the legislature of either nation.
Obama has taken issue with what he has called an imbalance in auto trade,
although South Korea disputes U.S. figures, which include hundreds of thousands
of autos produced by Hyundai Motor's plant in Alabama.
South Korea's ban on shipments of U.S. beef from cattle older than 30 months is
another major stumbling block for the bilateral trade deal, the biggest for the
U.S. since the North American Free Trade Agreement in 1993.
U.S. Trade Representative Ron Kirk recently said that he "will promptly, but
effectively, address the issues surrounding the KORUS FTA, including concerns
that have been expressed regarding automotive trade." But he added he will
prioritize beef before moving to the auto issue.
World Trade Online also reported that some officials on the U.S. National
Security Council "have privately indicated they want to see congressional passage
of the FTA this fall, but that this is not an official administration position."
The NSC officials believed that the signing of the FTA "would strengthen the
U.S.-South Korean alliance, especially in light of escalating tensions on the
Korean Peninsula," the magazine said.
North Korea's recent rocket launch in defiance of international pressure has
heated up things in the region. Following a U.N. condemnation of the launch, the
North said it was quitting the six-party disarmament talks and would restart its
partially disabled nuclear facilities.
North Korea insists the rocket sent a communications satellite into space, while
the U.S. and its allies see it as a disguised ballistic missile test.
The on-line magazine predicted that restructuring efforts at GM and Chrysler, to
be completed by June 1, will give a clearer view of the future of the KORUS FTA.
"After June 1, when these companies' future and access to federal funds are
clearer, the U.S. and South Korea will be in a better position to assess ways to
address the U.S. industry's complaint that the FTA auto chapter would lock in an
unbalanced trading relationship," the magazine said.
Obama has ordered the troubled GM, the biggest U.S. automaker, to come forward
with a new restructuring plan by June 1 and told struggling Chrysler to merge
with Fiat by May 1 if it hopes to get additional government funds.
Some experts say that the restructuring of the U.S. auto industry will eventually
help promote congressional approval of the trade deal.
"We may have an entirely different situation in terms of the U.S. auto industry
in the next 60 or 90 days," Jack Pritchard, president of the Korea Economic
Institute, recently said in a forum. "The U.S. may be far more receptive to doing
things particularly with the auto section of the FTA."
South Korea's National Assembly has been holding off on deliberating the FTA
citing growing protectionism in the Democrat-controlled Congress, which fears the
deal would undermine support from local trade unions, a key political base, due
to possible job cuts amid the worst recession in decades.
South Korean officials have said they will not renegotiate the FTA, while some
experts have suggested addressing shortfalls by way of side agreements or other
methods without revising the agreement itself.
The KORUS FTA "would add US$10 billion to $12 billion to annual U.S. gross
domestic product and around $10 billion to annual merchandise exports to Korea,"
according to a U.S. Trade Representative report.
hdh@yna.co.kr
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