South Korean and US negotiators ended a bumpy first day of negotiations in a new round of free trade talks on Monday as thousands of farm activists and unionists tried to storm the venue.
Trade officials are seeking to narrow differences in opening markets for farm goods, textiles, automobiles and pharmaceuticals in a race against an informal end-of-March deadline. The Bush administration's fast-track authority to negotiate trade deals expires in July, and the three months are needed for the deal to obtain Congressional ratification.
Talks on manufactured goods stalled as South Korea rejected a revised proposal by Washington to open its markets, Seoul's chief negotiator, Kim Jong-hoon, said. "The US side is trying to show good intentions, but it is still below our expectations," Kim was quoted as saying by South Korean media. "We are asking for a much more improved proposal."
The chief US negotiator, Wendy Cutler, said the two sides had yet to begin serious talks on opening South Korea's politically explosive rice market. The number of protesters grew to about 10,000 as the day progressed but were blocked from the beach resort where the talks were being held by police in full riot gear.
About 80 protesters jumped into the sea and tried unsuccessfully to swim to the talks venue. Protesters clashed elsewhere with police, who had barricaded roads into the resort.
South Korean farmers have said a free-trade deal would destroy their livelihoods and they want extensive compensation packages from the government. Officials face tough negotiations on sticking points that could potentially make or break the deal in the fourth round of the talks aimed at creating the biggest US trade pact since the 1994 North American Free Trade Agreement.
South Korea will continue to resist US pressure to include wider rice market opening in the deal and push for greater access to US textile markets, officials in Seoul have said. But Seoul appeared to be backing down slightly on another sticking point, that products made in a South Korea-run industrial park in the North Korean town of Kaesong be given preferential tariff treatment.
North Korea's nuclear test on October 9 made Washington more determined to keep Kaesong products off the table, Cutler said. "Our position once again is this agreement is about the US and the Republic of Korea and about covering goods produced in the US and the Republic of Korea," Cutler said.
South Korea is the world's 10th largest economy and the seventh largest US trading partner, with two-way trade totalling about $72 billion last year. Citigroup's chairman, William Rhodes, who also heads a US-Korea business council, said that this week was crucial to advance the talks. "There is a real opportunity here that the military alliance between the US and South Korea becomes a fully fledged military, trade and economic alliance," Rhodes said in an interview with the Financial Times.
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