Transcript of Assistant USTR Wendy Cutler at the Closing Press Conference at 6th Round of US-Korea FTA Talks

AUSTR Cutler: And if I can add to the rules, if you ask more than one question, I’ll pick the question I want to respond to.

As we conclude the Sixth Round of KORUS FTA talks, I think it is fair to say there was a new mood and spirit of intensity that characterized our work this week.

I have spent more time with Ambassador Kim over the past few days than I have in any previous round – working diligently with him to address both the tough and easier issues remaining to be resolved.

And this indicates that the negotiations have entered what I expect to be the final phase.

Both sides realize how much there is at stake.  We both understand that our success will send an important signal to our trading partners in the region who are watching us closely and around the world that two large countries with complex modern economies can conclude a solid, mutually beneficial agreement.

This week we made progress in a number of areas.

First in the industrial tariff area: the United States and Korea improved their offers. The US improvement included our tariff offer – excuse me.  The U.S. offer covers over 500 products worth over 1.9 billion dollars in trade and Korea agreed to improve its offer on 650 products worth $1.6 billion in trade. This is significant movement and it builds on the movement in the industrial area that we made in our last round in Big Sky, Montana.

And products in this improved tariff package includes products of interest to both the U.S. and Korea, such as chemicals, machinery, fish, and wood.

And both sides agreed as part of its improvements, to start moving products out of our respective “Undefined” baskets.

And we’ve both moved 50 percent of the number of the most-sensitive products in our “Undefined” baskets to the 10-year basket.

I know I’ll get a question: we haven’t moved autos yet out of the “Undefined” basket, but we have moved other products of interest to Korea.

The agriculture discussions also went well.  There was a convergence of views on the less sensitive products.

And there was also discussion on some of the more sensitive items such as tariffs beef, pork, poultry, and horticulture.  on I understand that they were able to have a detailed discussion on many items in Korea’s undefined basket, including on beef, pork, poultry, and horticulture.  We still have a lot of work to do to narrow our differences in these areas, however.

On the environment chapter, we made important progress and very few issues in this chapter remain to be resolved.

Most significantly, we agree that both the United States and Korea will ensure that their laws and policies provide for and encourage high levels of environmental protection.

As I mentioned on Monday, the negotiations on some of the most sensitive items – autos, pharmaceuticals and trade remedies – were elevated to the chief negotiator level, and Ambassador Kim and I had good discussions on these issues.

From my perspective, I’d hoped we’d make more progress in the automotive and pharmaceutical areas, but it shouldn’t be taken as a negative sign that I don’t have any breakthroughs to announce today.

So, we still have our work cut out for us, but, I am encouraged by the fact that this week we were able to keep our focus on the ultimate goal – an agreement that will benefit both countries.

I have a lot of homework to do before our next round of talks.  That is a good sign.  It means we moved forward this week and that I have new ideas to review and discuss with my senior colleagues back in Washington.

I can tell you that upon my return to Washington, I will have a lot of homework to do before the next round of talks. But that is a good sign, it means we’ve moved forward and I have new ideas to review and discuss with my senior colleagues back at home.  We will look to make as much progress as possible between now and the 7th round of negotiations – the details, the date will be announced by Ambassador Kim later today.

I envision a lot of activity in the lead up to this next round, at the working level, at the Chief negotiator level, and possibly even more senior levels.

So, I leave here, my notes say ‘tired’ – I’m very tired – but invigorated.

I will be gearing up, when I return home, for what will be an undoubtedly busy few weeks and I continue to look forward to make progress, culminating in a successful agreement.

Thank you, I’ll be glad to take questions.

Q: Ms. Cutler, in your report to Congress and in numerous interviews, you said that the US side will not accept Korea’s requests in trade remedies tabled in Montana, as they require legal amendments.  What are the chances that new proposals, which still require legal revisions?

AUSTR Cutler:  With respect to trade remedies, as our report to Congress also indicates, the negotiations are continuing and we anticipate receiving additional proposals from Korea in this area, and we’ll look at them very carefully.

Q:  Is there any narrowing of differences on the beef issue?

AUSTR Cutler:  With respect to the reopening of the beef market, these are separate discussions from the FTA, but the United States has made clear from day one of these negotiations, that in order for the FTA to happen, we’re going to need to see a full reopening of Korea’s beef market. We are now working with Korea on an agenda for a possible meeting to take place on the beef issue, hopefully in the very foreseeable future.

Steve Norton: Yes sir

Q: My name is Kim Yong-seuk from the Korea Times.  The United States…the US stance for the KORUS FTA so far is that as for the U.S. beef issue, the U.S. has asked the Korean side to accept U.S. bone-in beef.  And as for the trade remedies issues, such as anti-dumping issues, the U.S. has said that they will not revise their domestic laws. And if the negotiations go on like this, I think this will end up in a kind of unfair agreement between both sides.  What do you think?

AUSTR Cutler:  (laughter) There are tough issues on the table in this negotiation, there’s no doubt about it.  And, we’re trying to work together as closely as possible to listen to each other’s concerns, to understand each other’s priorities, and also to understand their sensitivities.  And with that spirit, we’re proceeding and we’re trying to conclude the best agreement possible, and so comparing what we want on beef to what we don’t want to do on trade remedies, to what Korea is reluctant so far to do on pharmaceuticals, if we get into that kind of discussion you could be extremely negative about this negotiation. But my view coming out of here this week is that this deal can be done and I am going to work very hard to do everything I can to make these negotiations – to have them culminate in a successful KORUS FTA.

Steve Norton: Yes, sir

Q: My name is Hong [unclear] from Joong-ang Daily.  The KORUS FTA negotiations are now nearing its end, and there is many discussions about the possibility of extending the negotiations, are there going to be an 8th round or a 9th round from now on? And is it possible for us to continue the discussion except for several issues after the 7th round?

AUSTR Cutler:  Clearly, our objective as we head to the 7th round in February, will be to narrow as many issues as possible, and in fact in our meetings this week, Ambassador Kim and I have spent a lot of time with individual negotiators, getting a better understanding of which issues they can agree to at their level, and which issues may need to be elevated to the chief negotiator level or perhaps to even more senior levels.

No decision has been taken on an eighth round.  We’ll have to see where we are at the end of the 7th round before such a decision is taken.

But I would also say at this stage in the negotiation, I would anticipate that you’re going to see a lot more activity in terms of smaller meetings, informal meetings, and increased contact at all levels.  That’s the only way we’re going to get this deal done.

Steve Norton: Anyone else? Yes, sir.

Q: My name is Lee [unclear] from CBS.  You just mentioned that it shouldn’t be taken as a negative sign that you are not prepared to report any breakthroughs in the trade remedies, pharmaceuticals, and automotive today.  Then can you explain why we should not take it as a negative sign?

AUSTR Cutler:  Sure. These are extremely sensitive issues, and require a lot of discussion with our stakeholders back at home and require a lot of thought and a lot of discussion and it’s very typical in trade negotiation for these issues to come together at the very end of the negotiation.  And I totally understand that as members of the media, it’s extremely frustrating for you because you want to write stories about breakthroughs.

So I just urge you to be patient and not to interpret the fact that I can’t announce breakthroughs today as a signal that these negotiations are not on track or not headed in the right direction. They are.

Q: My name is Kim Yo–seok from Korea [unclear] Daily.  As for the environment sector, you mentioned that important progress was made in this round, and very few issues are remaining to be resolved.  And within the Korean negotiations delegation, for the 7th round there was a kind of speculation that the U.S. side would make some new proposals in the labor and pharma sector.  So considering that there will be no more new proposals from the U.S. side in these sectors, so can we regard it as the deal was made in these sectors? And this is the additional question to you, do you know that the Korea delegation’s confidential document was leaked to the press?  Did you see it, and did it help you?

AUSTR Cutler: Okay, you asked two questions, I’m going to pick that last one because I was waiting for someone to ask me that.  I agree with Ambassador Kim that the leaking of his negotiating strategy was extremely regrettable, and as a trade negotiator, I really feel for him – I would not want to be in his shoes. And I can assure you that if a confidential document like this about the U.S. negotiating strategy were leaked to the press, I’d find it very damaging.  All that said, I don’t want to overstate the impact of this.  What the document has indicated is where the Korean government has negotiating flexibility, basically if it saw a comparable movement from the U.S. side.  And for the sake of Ambassador Kim and his team, and more broadly for the sake of the Korean national interest in this negotiation, I would hope that there aren’t more leaked documents.  I don’t think it’s helpful to the process.  I might have felt good for a day or so, but it just doesn’t help the process.

Steve Norton: Yes, sir.

Q: I’m Ho Jun from Gyanghang Daily.  Do you think of the possibility in which both sides cannot reach agreement in the last weeks, and what do you think about the likelihood of such things to happen?

AUSTR Cutler:  Sorry, the likelihood of…?

Q: that both sides cannot reach an agreement at the last minute.

AUSTR Cutler:  As I say, I’m optimistic.  I know we have our work cut out for us.  We made important progress this week, so I don’t want to talk about how we’ll feel if we’re not successful.  I think it’s important for me, as Chief Negotiator, to keep my eye on success and to do everything I can to achieve that objective. Thank you.