U.S. and South Korea in Free Trade Talks

Elena
10 Jul, 2006
New York City

The two sides are trying to reach an agreement by the end of 2006 aiming to slash tariffs and other trade barriers between the two countries. The talks received strong resistance from South Korean labor groups, especially farmers who have protested against any reduction in protections for agriculture, particularly rice.

[R]8:00AM The U.S. and South Korea opened Second round of free trade talks.[/R]
Following a week of negotiations in Washington last month, the U.S. and South Korea opened second round of free trade talks trying to reach an ambitious free trade agreement that aims to slash tariffs and other trade barriers between the two countries. The two sides aim to wrap up an agreement by the end of 2006 so they can submit it to their legislatures for debate and approval.

The talks face strong resistance from South Korean labor groups, especially farmers who have protested against any reduction in protections for agriculture, particularly rice. Besides agriculture, the status of a South Korea-backed industrial zone in North Korea is seen as another major sticking point in hammering out an accord. South Korea wants goods produced there subject to the agreement, while Washington has opposed the idea, saying a deal should only cover goods manufactured in the Republic of Korea. The U.S. wants more access to South Korea''s agriculture, automobile and pharmaceuticals markets, among others.
Police expect about 50,000 protesters, while groups opposed to the talks hoped for numbers to top 100,000.


[R]7:30AM Asian shares finished trading mostly in positive territory.[/R]
Asian markets finished broadly higher. Japan''s Nikkei 225 Average closed up 1.6% at 15,552.81. Banks including Mizuho Financial led the gainers. Other financials on the increase included Resona Holdings, shares of which gained 6.4%, and Mitsubishi UFJ which closed up 5.16%. Among blue chips, Canon advanced 2.3% and Honda gained 2.2%.

South Korean investors followed Japan''s lead, as bank and construction companies led shares higher. The Korea Composite Stock Price Index, or Kospi, ended up 2%, or 25.36 points, at 1299.29. GS Engineering & Construction led the increase in the construction sector, adding 6.9% ahead of its second-quarter earnings release tomorrow. Hyundai Engineering & Construction gained 4.7% and Daewoo Engineering & Construction advanced 2.7%.

Among markets, which made smaller gains were Taiwan''s Weighted Index, up 0.33%; Australia''s S&P/ASX 200, gaining 0.15% ; and Hong Kong''s Hang Seng Index, advancing 0.88% to close at 16,603.81. Shares in Shanghai and Wellington were marginally higher. The China Enterprises Index of Hong Kong-listed mainland shares inched lower 0.14% at 6,828.04. Indonesia''s Jakarta Composite was off 0.6%, while Singapore''s Straits Times Index dipped 0.27%. Shares in Kuala Lumpur ended basically flat.


[R]6:30AM European stocks start the week lower due to cheaper oil prices.[/R]
European markets were lower by mid-morning trading. The U.K. FTSE 100 index declined 0.1% at 5,886, the German DAX Xetra 30 index lost 0.1% at 5,677 and the French CAC-40 index sank 0.2% at 4,945. As August delivery US crude was down 41 cents to $73.68, this weighed on the oil sector with Neste Oil off 1.6 per cent to, Norsk Hydro down 2.1% and Statoil 1.6% off. Renault declined 1.7% following General Motors statement late Friday that it has authorized alliance talks with the French car maker and partner Nissan.

European movers included, British insurance company Standard Life advancing to 240.5 pence on its first day of trading as a listed company, after pricing its offering at 230 pence. Standard Life, which previously was mutually owned by its customers, will join the FTSE 100 at the next quarterly reshuffle.

Crude oil prices fell Monday as traders took profits in the wake of recent gains and amid easing worries about Iran''s nuclear dispute after the country''s top nuclear negotiator expressed optimism that the standoff can be resolved peacefully. Light, sweet crude oil for August delivery shed 37 cents to $73.72 a barrel. The Brent crude oil contract for August shed 27 cents to $73.24 a barrel. Gold traded lower at $625.70 an ounce, down $4.60 an ounce from Friday''s close of $630.30.

The euro fell against the U.S. dollar on Monday as traders pondered the wider impact of a decision to leave interest rates unchanged by the European Central Bank. The euro bought $1.2788 in morning trading, down from its level of $1.2814 late Friday. The British pound fell to $1.8485, down from $1.8525 at the end of last week. The dollar bought 113.63 yen, down from 113.91 yen in New York late Friday, a dip that comes in the face of a planned meeting by the Bank of Japan on interest rates this week.