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South Korea, U.S. reach free trade agreement, biggest deal for U.S. since NAFTA

South Korea, U.S. reach free trade agreement, biggest deal for U.S. since NAFTA

The United States has reached its biggest free trade agreement since NAFTA, clinching a last-minute deal with close security ally South Korea that it hopes will bolster bilateral ties and provide added spark to global trade talks.
"The free trade agreement we are announcing today is a historic accomplishment," Deputy U.S. Trade Representative Karan Bhatia told reporters on Monday after eight days of talks. "It is an agreement for the 21st century."
The deal, which requires approval by lawmakers in both countries, is the biggest for Washington since the North American Free Trade Agreement signed in 1993, and is expected to lead to more than 90 percent of U.S. exports to South Korea being duty free within three years.
It is the biggest trade deal ever for South Korea, which in nearly 50 years has grown from one of the world's poorest countries to become its 10th-largest economy.
"We cannot become an advanced country without challenging ourselves," President Roh Moo-hyun said in a televised address, addressing the concerns of many who felt South Korea cannot compete against an economy 15 times bigger.
U.S. President George W. Bush, who phoned Roh last week to reconfirm their commitment to help push through a deal as negotiators were stuck on contentious issues such as auto trade, said the deal went beyond economics.
"The agreement will also further enhance the strong United States-Korea partnership, which has served as a force for stability and prosperity in Asia," Bush said of Washington's first free trade deal in Northeast Asia, which also includes powerhouse economies Japan and China.
South Korea and the U.S. agreed to eliminate and lower tariffs and other trade barriers in a wide range of industrial goods and services, including automobiles, agricultural products and financial services. The agreement also covered sectors such as e-commerce.
Bhatia said that the bilateral deal is positive for multilateral efforts such as the Doha Round of global trade talks.
"Trade liberalization begets more trade liberalization," he said. "Doha remains the Bush Administration's No. 1 free trade priority, but the benefits to be accrued from a significant bilateral deal like this Korea deal are significant."
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Associated Press Writers Burt Herman, Kwang-Tae Kim and Bo-Mi Lim in Seoul contributed to this report.


Updated : 2021-10-19 19:19 GMT+08:00