Key Issues from NTE Report Officially Raised for the First Time... Covering Rice, Beef, Pharmaceuticals, and More
U.S. Demands Expanded Purchases of American Products under 'Commercial Considerations'
Korea Requests Tariff Exemptions for Semiconductors and Pharmaceuticals
Attention on Negotiation Guidelines from the Next Administration
The United States has reportedly demanded that South Korea address the non-tariff barrier issues specified in the National Trade Estimate (NTE) report during the director-general level Korea-U.S. technical consultations on tariffs.
An official from the trade authorities, who was part of the government delegation, told reporters on the 26th, "In this second round of technical consultations, the U.S. specifically raised issues listed in the National Trade Estimate (NTE) report for the first time." The official added, "We responded based on our existing position, and we plan to develop a more detailed response after reflecting the opinions of relevant ministries and industries."
The annual report published by the United States Trade Representative (USTR) includes issues such as restrictions on the import of U.S. beef under 30 months of age, rice import regulations, restrictions on the export of high-precision maps, emission standards for imported vehicles, and drug pricing methods. The official explained, "Some of these issues are not new this year but have been repeatedly raised over the years, and this is the first time the U.S. has officially put them on the table during these consultations."
The U.S. side reportedly set the resolution of the trade imbalance between Korea and the U.S. as the core goal of the negotiations. To achieve this, they demanded not only the removal of non-tariff barriers but also measures to expand purchases of U.S. products. In particular, under the 'commercial considerations' category, the U.S. showed interest in how much more the Korean government and companies could purchase American goods.
On the other hand, the Korean delegation demanded not only the mutual 25% tariffs but also a complete exemption for existing item-specific tariffs such as on steel and automobiles, as well as for items that could be subject to future tariffs, including semiconductors and pharmaceuticals. The Korean side also emphasized the unique status as a Korea-U.S. Free Trade Agreement (FTA) partner and continuously conveyed to the U.S. that a differentiated approach from other countries is necessary.
The official stated, "Since the FTA was signed, tariffs on many items have been eliminated, and rules of origin have already been agreed upon." The official added, "There is a sufficient basis for discussion within the FTA framework, and it appears that the U.S. is also aware of this."
The second round of technical consultations was conducted in small groups by sector. The Korean side included about 20 officials from the Ministry of Trade, Industry and Energy, Ministry of Foreign Affairs, and Ministry of Economy and Finance, while the U.S. side included more than 50 officials from the USTR, Department of Energy, Department of Commerce, and Department of Homeland Security. The Ministry of Economy and Finance participated to monitor the overall flow of the consultations, although currency and financial issues were not discussed. Sensitive financial issues such as exchange rates were not included in this round of consultations.
The U.S. is currently conducting parallel technical consultations with 18 countries, including South Korea, and has set July 8 as the target deadline for concluding the so-called 'July Package' negotiations. The official noted, however, "The U.S. understands that the Korean government will change immediately after the presidential election," and added, "We must carefully assess whether the negotiation deadline can be met." The official explained that any extension of the deadline would be a political issue to be discussed by the next administration.
The official said, "The second round of technical consultations has become the starting point for full-fledged negotiations between Korea and the U.S." The official added, "The next round of consultations will be scheduled in coordination with the U.S. after receiving guidance from the new administration."
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