2 April 2007

 

 

 

The United States and South Korea agreed the biggest U.S. trade pact for 15 years on Monday ….

 

In one major surprise, the United States agreed to give, at least in principle, preferential treatment to South Korean products made in North Korea.

 

The deal came after nine months of negotiations and sometimes violent protests in South Korea, mostly over fears that the country's heavily subsidised farmers could not survive a flood of cheaper U.S. farm products….

 

Seoul agreed in the end to phase out its 40 percent tariff on U.S. beef over 15 years, but did not budge on the most sensitive, and heavily protected, farm product -- rice.

 

On another major sticking point, the two agreed to open their markets more to each other's autos.

 

The accord between the United States and Asia's third-largest economy was struck just minutes before time ran out for the White House to use legislation allowing it to present a deal to Congress that can be rejected or accepted, but not changed.

 

Some estimates say an agreement could add $20 billion to the already more than $70 billion of two-way trade each year.

 

In the talks' big surprise, the United States agreed in principle to give certain products from North Korea preferential treatment. That would accede to South Korea's request that goods it makes in an industrial park just inside North Korea get similar treatment to those made at home.

 

The United States had previously balked at the idea following North Korea's missile and nuclear tests last year.

 

The agreement comes with conditions, including progress in international talks to end North Korea's nuclear weapons program.

 

President Bush, in a letter to Congress released by the White House, said agreement would bring export opportunities for a range of U.S. businesses, promote economic growth and provide jobs&hellip