US, South Korea agree trade pact

The United States and South Korea agreed the biggest US trade pact for 15 years today.

The United States and South Korea agreed the biggest US trade pact for 15 years today.

The deal came only minutes before a deadline expired and followed 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 US farm products.

South Korea agreed to phase out its 40 per cent tariff on US beef over 15 years, but it was not immediately clear how much the two sides had conceded on other issues and whether South Korea's long-protected rice market would be opened up.

"We expect the FTA [free trade agreement] to provide a springboard for our economy to leap to an advanced economy," a press official quoted President Roh Moo-Hyun as saying.

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The deal between the US 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.

Much of the final bargaining focused on whether the parties could concede enough to each other on farm goods and cars, with both sides seeking lower tariff and other barriers to auto imports.

The US also wanted greater access to South Korea's lucrative financial services, including insurance, while Seoul pressed Washington to change anti-dumping laws it says are unfairly applied to its products.