SEOUL (Reuters) - Talks on reworking a free trade agreement (FTA) 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 one 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.
The agreement was signed under the previous administrations of both countries.
Some South Korean studies say the deal, the largest signed by the United States since the North American Free Trade Agreement, could boost by as much as a quarter annual bilateral trade, which sank to $66.7 billion last year.
Choi said the two sides did not discuss any further opening of South Korea’s beef market, 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 said Washington was dropping the beef issue to win concessions from Seoul on autos. The opposition Democratic Party said it would block as a matter of principle any deal subject to modifications at this week’s discussions.
Editing by Ron Popeski