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US, S. Korea Talk Free Trade, as Protesters Fill Seoul Streets

U.S. and South Korean negotiators have ended the first day of talks aimed at cracking open barriers to each other's exports. But basic disagreement over several sensitive issues could delay progress, even as the talks threaten to bring tens of thousands of angry protesters to the streets.

Several dozen protesters, massively outnumbered by about 2,000 riot police, gathered outside a Seoul hotel Monday where talks on a Korean-U.S. free-trade deal were underway.

The talks are aimed at producing a deal by next March slashing trade barriers between South Korea and the United States. The agreement is supported by business executives in both countries, who say it will produce billions of dollars of new exports and income opportunities for both countries.

However, there is also sharp opposition to trade liberalization here, especially among rice farmers, who have traditionally enjoyed government subsidies and other strong trade protections. Even though rice can be produced far more cheaply in other countries, many Koreans perceive rice cultivation as a key aspect of their cultural heritage.

Facing intense domestic pressure, chief South Korean trade negotiator Kim Jong-hoon has vowed rice will be left out of any deal with the U.S. But Wendy Cutler, the lead U.S. negotiator, says Washington will not back down on its insistence that rice and other farm products be included. "We're also looking for, like in all areas, improved market access in the agricultural sector," she said.

Another point of contention in the talks is the Kaesong industrial zone in North Korea. South Korea built and continues to pay for the zone in order to exploit cheap North Korean labor, and Seoul wants goods from Kaesong to be viewed under a free-trade deal as originating in the South. Washington has so far refused that demand, arguing too little is known about how the North Korean labor force is recruited, treated, and paid.

An alliance of anti-globalization groups is promising that protests will swell to 100,000 people by mid-week. Oh Jeong-ryol, who heads the alliance, says the average South Korean has a stake in fighting the deal.

He says the trade talks follow only economic logic, and will create crises for common people in areas including education, medical services and utilities.

Oh's rhetoric reflects a broader fear that the far larger U.S. economy will overwhelm entire sectors of the South Korean economy. A common anti-free-trade poster depicts a heavyweight American boxer who dreams of crushing a much smaller South Korean fighter.

Another poster shows the symbolic American character, Uncle Sam, carving up South Korea like a pie.

Neither delegation is predicting a breakthrough in this week's talks, but U.S. negotiator Cutler completely rules out the possibility the talks will fail. The two sides are under pressure to produce a deal that can be ratified before July 2007, when President Bush loses the right to submit the deal to Congress for a yes-or-no vote. After that time, Congress will be able amend any proposed deal, sharply reducing the chances for an agreement.