By Kim Tong-hyung
South Korea and the United States will resume talks this week to attempt a breakthrough in their long-stalled free trade agreement (FTA), government officials said.
The negotiations are likely to be challenging, however, as the countries have been struggling to find a middle ground on outstanding issues involving auto trade and beef.
Lawmakers of each country have been refusing to ratify the free trade pact that was inked in 2007, and U.S. has been pressing Korea to open its automobile and beef markets wider.
Trade representatives of both sides failed to finalize the deal ahead of the meeting between Korean President Lee Myung-bak and U.S. President Barack Obama at the Group of 20 summit in Seoul earlier this month despite earnest efforts.
Officials led by Korean Trade Minister Kim Jong-hoon and U.S. Trade Representative Ron Kirk will resume their next round of talks on Tuesday and Wednesday in Columbia, near Washington, Korea’s Foreign Ministry said Sunday.
Kim and Kirk have been meeting frequently in Washington and Seoul over the past month as the countries accelerated their efforts to clinch an agreement, but the talks have turned circular with the Koreans balking at U.S. demands for full-scale imports of American beef.
American carmakers have been claiming that the free trade pact doesn’t do enough to eliminate ``non-tariff trade barriers’’ that have kept their cars struggling for acceptance in the Korean market.
The 2007 version of the deal has the U.S. eliminating its 2.5 percent tariff on Korean-made cars within three years and Korea lifting the 8 percent tariff on U.S.-made cars.
U.S. officials have since been asking for more, including the easing of emission requirements and safety standards for imported U.S.-made cars. They have also been calling for Korea to eliminate the ``duty drawbacks’’ it provides to its carmakers, which gives them refunds for tariffs levied on imported parts used on their finished products.
According to officials close to the talks, Korea appears willing to compromise on the key issues related to auto trade, and it’s possible that the countries could agree on a new set of rules regarding fuel efficiency, emissions and safety requirements for American cars sold in Korea.
Regarding the issue of duty drawbacks, the countries will likely settle for Korea employing a five-percent cap on the refundable tariffs, identical to the condition agreed on its FTA with the European Union (EU).
It remains to be seen, however, whether beef will continue to be the deal breaker.
The Koreans, reluctant to touch the subject due to public sensitivity here, have been insisting repeatedly that beef should have no part in the FTA talks, only to be flustered by the U.S. attempts to bring the issue back again and again to the negotiating table.
Korea currently allows only imports of American beef from cattle less than 30 months old over fears of mad cow disease, while the U.S. has been demanding the country accept all cuts of beef irrespective of cattle age.
Following reports of mad cow outbreaks in the U.S., Korea banned imports of U.S. beef in 2003 before partially resuming it in 2008.
However, the lifting in the five-year important ban led to a wave of public protests that shook the Lee Myung-bak administration to its core, an experience government officials here clearly want to prevent from happening again.
U.S. beef exports to Korea reached $216 million last year, making Korea the fourth-largest importer of American beef products.