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US and S Korea agree trade deal US and S Korea agree trade deal
(about 2 hours later)
The US and South Korea have reached a free trade agreement, after 10 months of intensive talks.The US and South Korea have reached a free trade agreement, after 10 months of intensive talks.
The deal, which has not yet been formally announced, still requires legislative approval.The deal, which has not yet been formally announced, still requires legislative approval.
Both countries were keen to agree a deal, believing it will boost trade and economic growth. Both countries were keen to reach an agreement, believing it will boost trade and economic growth.
It is the biggest trade deal since the US signed the 1992 North American Free Trade Agreement, opening up the highly protected South Korean market. The deal, which will open up the highly protected Korean market, is the largest the US has signed since the 1992 North American Free Trade Agreement.
But the negotiations have been hampered by differences over various trading sectors, especially those of vehicles and agriculture. 'Export opportunities'
Heated argument There was pressure to close a deal, because President George W Bush's Trade Promotion Authority, a so-called "fast track" power, ends on 1 July, and any agreement had to be reached 90 days beforehand - by the end of Sunday, US time.
Steve Norton, a spokesman for the Office of the US Trade Representative, confirmed on Monday morning that an agreement had been reached. The US-South Korea free trade agreement will generate export opportunities for US farmers, ranchers, manufacturers and service suppliers President George W. Bush
The special power enables Mr Bush to send trade pacts to Congress, for a straight yes or no vote, but amendments are not allowed.
Negotiations have been hampered by differences over various trading sectors, especially those of vehicles and agriculture.
But in a letter to Congressional leaders released early on Monday, President Bush confirmed that an agreement had been reached.
"The US-South Korea free trade agreement will generate export opportunities for US farmers, ranchers, manufacturers and service suppliers, promote economic growth and the creation of better paying jobs in the US and help US consumers save money while offering them greater choices," he said.
Korean concerns
A South Korean presidential official also said a deal had been concluded, although no official announcement has yet been given.A South Korean presidential official also said a deal had been concluded, although no official announcement has yet been given.
The negotiations were long and protracted, and had already missed two US-imposed deadlines. The negotiations were long and protracted, and had already missed two US-imposed deadlines. They also raised heated passions on both sides.
They also raised heated passions on both sides. The free trade talks have generated protests on the streets of Seoul.
Trade between the two countries reached $72bn (£37bn) in 2005, and those in favour of the agreement insist it will help economic growth.Trade between the two countries reached $72bn (£37bn) in 2005, and those in favour of the agreement insist it will help economic growth.
But hundreds of South Koreans have protested against the deal, arguing that it would threaten their livelihoods. But hundreds of South Koreans have protested against the deal, arguing that a glut of US imports would make Korean businesses uncompetitive and threaten their livelihoods.
One protester set fire to himself close to the Seoul hotel where the talks have been taking place. One protester set fire to himself close to the Seoul hotel where the talks have been taking place while an number of opposition politicians have gone on hunger strike in protest at the proposed move.
There was pressure to close a deal, because President George W Bush's Trade Promotion Authority, a so called "fast track" power, ends on 1 July, and any agreement had to be reached 90 days beforehand - by the end of Sunday, US time. The Bush administration has sought to conclude bilateral free trade agreements with key allies in Asia.
The special power enables Mr Bush to send trade pacts to Congress, for a straight yes or no vote, but amendments are not allowed. It agreed a deal with Singapore in 2003, although a similar agreement with Malaysia has been delayed after the two sides failed to reach a consensus on access to key sectors such as banking and car making.