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US and S Korea agree trade deal US and S Korea agree trade deal
(40 minutes 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 reach an agreement, believing it will boost trade and economic growth.Both countries were keen to reach an agreement, believing it will boost trade and economic growth.
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.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.
'Export opportunities''Export opportunities'
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. 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 US-South Korea free trade agreement will generate export opportunities for US farmers, ranchers, manufacturers and service suppliers President George W. Bush 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. 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.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.But in a letter to Congressional leaders released early on Monday, President Bush confirmed that an agreement had been reached.
KEY ELEMENTS OF THE DEAL Cars: Korean firms such as Hyundai and Kia will get more access to US consumersTechnology: Korean TV manufacturers and mobile phone firms may benefit from lower taxesAgriculture: The deal could hit Korean farmers as duties on imported beef are scrapped
"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."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.
South Korean trade minister Kim Hyun-chong described the agreement as the "most important event" between the two countries since their signing of a military alliance in 1953.
The Federation of Korean Industries, which represents Korea's largest companies, welcomed the agreement saying it would promote the two countries' economic interests.
Trade between the two countries reached $72bn (£37bn) in 2005, and is expected to increase substantially as existing economic barriers are scrapped.
Korean concernsKorean concerns
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. They also raised heated passions on both sides.
The negotiations were long and protracted, and had already missed two US-imposed deadlines. They also raised heated passions on both sides.
The free trade talks have generated protests on the streets of Seoul.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.
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.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 while an number of opposition politicians have gone on hunger strike in protest at the proposed move. 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.
The Bush administration has sought to conclude bilateral free trade agreements with key allies in Asia.The Bush administration has sought to conclude bilateral free trade agreements with key allies in Asia.
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. 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 carmaking.