By Jane Han
Staff Reporter

President Lee Myung-bak's remarks that suggested additional auto talks under the already sealed Korea-U.S. free trade pact is setting off speculation over what may be freshly offered to disgruntled American car makers, who currently take up less than 1 percent of the domestic market share.

Industry experts and observers say that Seoul may allow U.S. firms to buy time by delaying certain tariff eliminations on Korean cars, but largely remain clueless on "what more can be discussed."

"The U.S. has yet to pinpoint exactly what it wants should we sit down again to renegotiate the deal," said an official of the Korea Automobile Manufacturer Association, who didn't want to be named. "Frankly, there isn't much more to give regarding auto trade."

U.S. auto firms and top officials in Washington have insisted that the Korea-U.S. free trade agreement (KORUS FTA) is unfair to the U.S. as the current arrangements alongside "non-tariff barriers" do not allow sufficient market access for American companies.

Under the current deal, South Korea will immediately lift its 8 percent tariff on imported cars when the agreement takes effect, while the U.S. will immediately scrap taxes on Korean vehicles with engine capacities below 3,000 cc, and phase out its 2.5 percent tariff on bigger cars over a three-year period.

Such key auto provisions have been the main sticking point holding up the U.S. Congress from ratifying the KORUS FTA, which was signed more than two years ago.

After a long stalemate, Lee attempted to give a push Thursday by telling his U.S. counterpart Barack Obama in a televised news conference that Seoul was willing to "talk" about problems Washington has over the automobile trade.

Cheong Wa Dae office was quick to rule out a renegotiation' of the FTA, following Lee's remarks, as officials and Trade Minister King Jong-hoon said the President only meant that he was literally "willing to discuss the issue."

"It just means if they say there are problems, we are willing to listen," Kim told reporters.

Lee Hye-min, Seoul's deputy minister of trade, added that changes to the auto provisions may undermine the balance of interests for both countries.

Automakers Unfazed

Despite the retriggered debate surrounding the auto trade, the local industry doesn't seem to be fazed over whether Seoul and Washington reopen talks or not.

An executive of Hyundai-Kia Automotive Group, the country's biggest car maker with up to 70 percent of the local market share, said it is hard to guess what kind of outcome will occur if the two sides opt for additional negotiations.

"We're not incredibly bothered over the simple fact that auto provisions may be under review again," he said, fending off speculation of any immediate or direct impact from the talks.

A Korea Auto Makers Association official said the fundamental reason American cars aren't popular in Korea is not because of tariffs and taxes, but because of their quality.

"European and Japanese cars are quickly ramping up their market share here," he said. "That should send a clear message to Detroit as to what the real problem is."

U.S. auto makers sold 6,980 vehicles in South Korea last year, taking up 0.72 percent of the local passenger car market, according to the Korea Automobile Importers and Distributors Association.

Experts say it is likely that President Lee had this in mind when he mentioned auto discussions again.

"Chances are that he made the remarks as a political strategy to give the stalled FTA a boost," said Kim Hyung-joo, a researcher at the LG Economic Research Institute.

jhan@koreatimes.co.kr