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Seoul, Washington Suspend Major Areas of Free-Trade Talks

South Korea and the United States have suspended free-trade talks in two critical areas, further decreasing the chance a successful deal will be reached by an important U.S. political deadline. Seoul is under fire for restricting imports of medicines and beef, while it accuses the U.S. of unfairly penalizing South Korean exports. VOA's Kurt Achin reports from the South Korean capital.

South Korea's chief negotiator on a free-trade deal, Kim Jong-hoon, says the talks are on hold in two key areas.

Kim says the two sides have stopped discussing for now, trade remedies - or the rules each country uses to protect its domestic producers - and pharmaceuticals.

Talks aimed at a free-trade agreement, or FTA, between South Korea and the United States began last June, and entered their fifth round this week in the U.S. State of Montana. An agreement would make it easier for the two countries to buy each other's products.

The negotiators are hoping to agree on a proposed FTA before next June, when President Bush loses the authority to submit a deal to Congress for a simple yes or no vote. After that point, Congress will be able to seek amendments to any trade deal, greatly complicating the chances of passage.

FTA supporters say a deal would boost the two countries' trade relationship, which already totals more than $70 billion a year, creating job and income opportunities on both sides.

However, both are also trying to protect domestic producers in politically sensitive areas from the effects of international competition.

South Korean producers say they have been excessively targeted by American allegations of "dumping" - the selling of products to another country for less than their cost of production.

The United States says South Korea's health care system unfairly protects Korean pharmaceutical producers, by reimbursing citizens only for drugs on a government-approved list, which is comprised overwhelmingly of Korean products.

Wendy Cutler, Washington's senior negotiator at this week's FTA talks, accuses the South Korean side of showing very little flexibility.

"The Koreans came to us and said, here is our package of proposals - can you say yes to all of them? We were not in a position to do so," she said.

The fact this week's talks are being held in Montana - a major U.S. beef-producing region - is a reminder of another point of friction. Seoul has turned back three separate shipments of U.S. beef in the past month, saying the presence of tiny bone fragments presented the risk of mad cow disease.

Seoul stopped all imports of American beef in 2003 after a cow with the disease was found in the U.S. Imports began again in November, under strict regulations. U.S. producers say all U.S. beef is safe, and that South Korea is searching for a pretext to block the imports.

Talks on 14 other trade areas are still going on in Montana, and some of the most sensitive - especially those dealing with rice and other agricultural imports - have not even been discussed yet.

Many South Koreans perceive agricultural imports as a serious threat to traditional Korean farming. South Korean farmers have made up the bulk of anti-FTA protesters on the streets of Seoul over the past 18 months.