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S.Korea, US at Odds over Auto Import Tariffs

Written: 2010-12-03 07:25:55Updated: 2010-12-03 18:02:48

South Korean and U.S. trade officials will seek to narrow differences Friday over auto import tariffs during talks in Washington on their pending free trade agreement (FTA).

The two sides earlier decided to extend the negotiations by an additional day after failing to come to a compromise on auto import tariffs.

World Trade Online quoted sources as saying that “South Korean negotiators are continuing to resist U.S. demands for additional concessions in the auto sector, such as a longer phaseout for a U.S. car tariff, and are insisting that any major concessions they make would have to be offset with U.S. concessions on agriculture.”

The U.S. has requested that Seoul delay the elimination of the two-and-a-half percent tariff on most autos and auto parts. Initially, the elimination of the tariff was set to be completed within three years.

Seoul has reportedly expressed reluctance to the U.S. request and has instead asked that the U.S. delay the reduction of tariffs on American farm goods.

Under the current form of the trade accord, two-and-a-half percent of tariffs on cars with an engine displacement between one-and-a-half and three liters will be eliminated once the agreement takes effect. Tariffs on cars with engine displacements over three liters will be removed after three years and tariffs on pickup trucks will go after ten years.

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