After nearly four days of talks, South Korea agreed to give the US five years to phase out a 2.5 percent tariff it levies on Korean-built cars, rather than cutting the tariff immediately, clearing a key obstacle to a deal on the long-stalled US-South Korea trade pact, The Wall Street Journal reported Friday.
Details of the revised pact, which must still be ratified by both nations' legislatures, are expected to be released later Friday, barring a last-minute snag. The proposed trade pact, if ratified, would be the largest bilateral trade deal the US has completed since the 1994 North American Free Trade Agreement.
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The tariff compromise was vital for securing support for the revised pact from US auto makers and unions, say people familiar with the talks.
The provision, while economically negligible, was hard-fought by auto makers in talks this week led by US Trade Representative Ron Kirk and South Korean Trade Minister Kim Jong-hoon and which included US Treasury Secretary Timothy Geithner, Ford Motor Co. CEO Alan Mulally, and United Auto Workers union officials.
The 2007 Korea trade pact, which the US was seeking to revise to better favor US auto makers and beef producers, provided for an immediate end to the car tariff. Ford had pressed for a 10-year phaseout, making the agreed provision a meet-in-the-middle compromise.
Disagreement between the two nations over the tariff were the main reason talks on revising the Korea FTA collapsed at the Group of 20 meeting in Seoul last month.