US and S Korea launch trade talks

The US and South Korea want closer trade ties

The US and South Korea have launched talks aimed at creating a free trade agreement between the two countries.

A successful deal would expand "America's engagement in Asia", President George W Bush said.

It would also be the biggest free trade pact involving the US since the North American Free Trade Agreement with Canada and Mexico was created in 1993.

However, the negotiations are expected to face stiff opposition from South Korean farmers opposed to trade deals.

Critics in the US of President Bush's free trade polices are also concerned about the impact any deal with South Korea would have on American jobs.

Strategic benefits

If a deal is clinched, it would create the biggest US free trade agreement in Asia.

South Korea is the US's seventh-biggest trading partner, and trade between the two countries totalled more than $72.5bn in 2004.

The US is South Korea's second-biggest trading partner after China, and Seoul's main source of foreign direct investment.

"A free trade agreement with the Republic of Korea will provide important economic, political and strategic benefits to both countries and build on America's engagement in Asia," President Bush said.

'Important event'

Supporters of a free trade agreement see benefits for both sides.

US consumers would expect to see cheaper prices for South Korean goods such as cars, mobile phones and televisions, while South Korea would gain access to cheaper US agricultural products.

South Korea described the plan to launch free trade talks with Washington as the "most important event" since the Korean War, when Seoul signed a military alliance with the US more than 50 years ago.

Negotiations to establish a free trade agreement between the US and South Korea are expected to last for a year.

The US has free trade pacts with Singapore and Australia in the region, and is currently negotiating similar accords with Thailand and Malaysia.