U.S. starts free-trade talks with S. Koreans

WASHINGTON — South Korean cars, cellphones and other consumer goods should drop in price if the United States and its Asian partner complete the biggest free-trade deal since America tore down barriers with Mexico and Canada.

The start of talks to link the U.S. with its seventh-largest trading partner were announced Thursday in a ceremony at the U.S. Capitol.

The negotiations, which can begin after a 90-day consultation period with Congress, are expected to take at least a year, and it's an open question whether they will succeed. There is strong resistance, especially among South Korean farmers, to giving up some protections, and there have been violent street protests.

And Congress could face stiff opposition from critics of the administration's free-trade policies. Americans would see cheaper prices for such products as South Korean cars, cellphones, televisions and other consumer goods, but critics are concerned more U.S. jobs might go overseas.

From an economic standpoint, the deal would dwarf any previous U.S. free-trade pacts except the 1993 North American Free Trade Agreement that tore down barriers between the U.S., Canada and Mexico.

U.S. Trade Representative Rob Portman and his Korean counterpart, Hyun-Chong Kim, announced the negotiations during a ceremony attended by senators and House members who had urged the administration to pursue a deal.

Portman said he recognized that completing the talks in a year was an ambitious goal but that they needed to be wrapped up by the end of 2006 to be sure the deal could be voted on under fast-track procedures due to expire in mid-2007.

Both Portman and Kim insisted the completed deal would be comprehensive and that there was no understanding going into the talks that agriculture, which is particularly sensitive in South Korea, would be spared.

"We will continue to work to convince our farmers that they will have to find some niche products" that can be exported, Kim said.

President Bush issued a statement saying a pact with South Korea "will provide important economic, political and strategic benefits to both countries and build on America's engagement in Asia."

Bush has pursued free-trade deals, pushing the number of foreign countries with such pacts from four — Canada, Mexico, Israel and Jordan — when he took office, to 17. The Jordanian agreement was negotiated by the Clinton administration but did not win congressional approval until Bush became president.

Bush has reached pacts with Australia, Bahrain, Chile, Morocco, Oman, Peru, Singapore and six nations covered by the Central American Free Trade Agreement: Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. The latter agreement has not gone into effect, and Congress has yet to approve the Oman and Peru deals.

South Korea has the 11th-largest economy in the world. U.S. exports into that market in 2005 totaled $25.1 billion through November, up 4.6 percent from the same period in 2004. The biggest U.S. sales came in computer chips and industrial machinery.

South Korea shipped $40.1 billion in products to the United States through November, down 5.4 percent from the same period in 2004. The leading South Korean products sold in the United States were passenger cars and household goods, a category that includes cellphones, computer chips and televisions. South Korea is Washington state's fifth-largest export market, worth nearly $2.1 billion in 2004

America's trade deficit with South Korea totaled $15 billion through November, a gap analysts said could present problems getting a deal through Congress.

Rep. Sander Levin, D-Mich., complained South Korea continues to protect its domestic auto industry with high barriers that keep out U.S. autos and auto parts, while South Korean producers such as Hyundai enjoy wide access to the U.S. market.

In 2004, South Korean automakers sold 688,700 vehicles in the United States, or 4.1 percent of the U.S. market, while American automakers sold only 5,415 vehicles in South Korea, Levin said, citing government figures.

"Korea is a very protected economy. It will be a fight in this country and in South Korea to get it ratified," said Gary Hufbauer, senior economist at the Institute for International Economics, a Washington, D.C., think tank.