CORRECTED - CORRECTED-UPDATE 1-S.Korea's Lee says trade deal key test of US

Published 11/03/2010, 11:25 PM

(Corrects to show NAFTA came into force in in 1994 not 1984)

By Jack Kim

SEOUL, Nov 3 (Reuters) - South Korean President Lee Myung-bak said on Wednesday the United States will be sending an important message on its commitment to free trade if it finally advances a pact it signed with Seoul on opening their markets.

The two sides are working to conclude discussions addressing U.S. industry concerns that a free trade deal signed three years ago does not do enough to open South Korean markets to U.S. autos and beef.

"I believe concluding the South Korean-U.S. FTA carries an important message on free trade as far as the U.S. position is concerned," Lee told a news conference.

The pact is the largest signed by the United States since the North American Free Trade Agreement (NAFTA) that went into force in 1994, and some South Korean studies said it could boost $78 billion U.S.-South Korea bilateral trade by as much as a quarter.

Lee added that he and U.S. President Barack Obama were in agreement it would be in the two countries' interest to conclude discussions as soon as possible.

Lee and Obama hoped to resolve outstanding issues by the time the two leaders meet in Seoul next week on the sidelines of a two-day G20 summit, he said.

"We already have an agreement so I don't believe it should be very complicated," Lee said. "If the trade ministers of the two countries look at what is in our mutual interest, then I think there is a chance. I'm positive about this."

The United States and South Korea must thrash out issues connected with trade in beef and autos that have blocked U.S. congressional approval of the pact, which has been delayed because of some U.S. lawmakers' objections.

Senior trade officials from the two sides will meet in Seoul beginning on Thursday to try to resolve outstanding issues, and the talks now scheduled for two days could go on for more, South Korea's trade ministry said later on Wednesday.

The two sides are also planning to arrange a meeting for South Korean Minister for Trade Kim Jong-hoon and U.S. Trade Representative Ron Kirk, it said.

South Korean officials have said Seoul was opposed to making any changes to the pact itself but was willing to listen to U.S. industry concerns.

The deal has broad support among South Korea's ruling Grand National Party but has yet to be approved by the country's unicameral assembly. The country's small but politically powerful farm lobby is opposed to the deal.

The U.S. International Trade Commission has estimated the pact would boost annual U.S. exports to South Korea by about $9.7 billion to $10.9 billion, primarily in agricultural products, machinery, electronics and transportation equipment, including passenger vehicles and parts.

It projected U.S. imports from South Korea to increase $6.4 billion to $6.9 billion, primarily in textiles, apparel, leather products, footwear, machinery, electronics, and passenger vehicles and parts.

U.S. exports to South Korea totalled $28.6 billion in 2009 and its imports from that country were $39.2 billion. (Editing by Alex Richardson)

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