WASHINGTON, March 13 South Korea will not be
welcomed into a planned Pacific free-trade pact until all
problems are resolved in carrying out an existing trade deal
with the United States, a senior U.S. official said on Thursday.
Two years after the agreement came into force, the United
States was still trying to make sure promises to ease the path
for U.S. exports into South Korea were fully met, the official
said, pointing to problems with customs regulations and autos.
The South Korea-U.S. agreement (KORUS) was at the time the
second-largest U.S. trade pact after the North American Free
Trade Agreement with Canada and Mexico, but now pales beside
massive trade deals being negotiated between the United States
and Europe and another with 11 Pacific nations, including Japan.
South Korea has flagged its interest in joining the
Trans-Pacific Partnership, but the United States will insist on
having the bilateral deal working properly first.
"We have made it clear to Korea that to join TPP we would
expect full KORUS implementation from them and we are working on
issues in that regard in the customs and autos areas," the U.S.
official said on a conference call with reporters.
South Korea, like other interested countries such as Taiwan,
would not be allowed to join the TPP until current negotiations
are wrapped up. These are being dragged out amid a stand-off
between the United States and Japan over farm and auto exports
and no deadline has been set for completion.
The U.S. official said many issues with KORUS implementation
had been resolved, but there were still problems with how the
South Korean customs service verified certificates of origin to
prove that goods came from the United States.
"The Korean customs service has in our view been requiring
excessive documentation .. and this has caused concern among
stakeholders, not only in the manufacturing sector but with
respect to agricultural products as well," the official said.
Another issue was draft regulations setting very high
penalties for cars with higher emissions, which the United
States was keen to ensure did not disproportionately affect U.S.
cars. Local automakers, such as Hyundai, had also
Foreign brands accounted for 12 percent of the Korean auto
market in 2013, up from just 2 percent a decade ago.
Under KORUS, duties were lifted immediately on almost 80
percent of U.S. consumer and industrial exports, and the U.S.
Trade Representative said nearly 95 percent of bilateral trade
was to become duty free within five years. Most remaining
tariffs would be eliminated within 10 years.