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South Korea, U.S. go down to wire on trade talks

SEOUL (Reuters) – Talks on reworking a free trade agreement between the United States and South Korea are going down to the wire, with the two sides trying to resolve differences on cars before their leaders meet on Thursday.

South Korean Minister for Trade Kim Jong-hoon and U.S. Trade Representative Ron Kirk, meeting for a second day, were unable to resolve issues raised by the U.S. auto industry and holding up approval by the U.S. Congress.

“Discussions are ongoing and the situation is extremely variable,” South Korea’s Deputy Minister for Trade overseeing FTA negotiations, Choi Seok-young, told a briefing. “The trade ministers will meet again tomorrow.”

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

“The U.S. side has raised concerns on automobile fuel mileage and greenhouse gas emission standards,” Choi said, declining to disclose further details.

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.

The two countries hope to reach a deal before President Barack Obama meets South Korean President Lee Myung-bak on the sidelines of the November 11-12 G20 summit.

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 pact, especially in the auto provisions, to open Korea’s market to more American exports while protecting American workers against a surge in imports.

“Any deal that doesn’t do that is going to be met with strong opposition from many members of Congress who are concerned about the economy and do not want any part of a trade agreement that was negotiated by the Bush administration and doesn’t help domestic industries,” Representative Louise Slaughter, a New York Democrat, said in a statement.

One congressional aide who has been following the talks offered a glum assessment of how they have been going.

“Things are not going particularly well. The Koreans have not really engaged,” the aide said.


Jeffrey Schott, an analyst at the Peterson Institute for International Economics in Washington, said he believed the two sides were headed for an agreement.