South Korea warns free trade deal with U.S. could collapse over rice market

South Korea warned Monday a potential free trade agreement with the United States could fail if Washington pushes to include rice in the deal.

"The negotiations may collapse if the FTA fails to meet our expectations or the U.S. demands rice concessions, which our side cannot accept," Kim Jong-hoon, Seoul's chief negotiator, told reporters as the two sides began a round of high-level talks aimed at clinching a deal by the end of this month. "We made it clear we will deal resolutely with such a situation."

Seoul and Washington need to wrap up the agreement by March 31 because of the approaching end of U.S. President George W. Bush's Trade Promotion Authority, which allows him to send trade agreements to Congress for straight yes-or-no votes without amendments.

The tight time schedule has forced South Korea and the U.S. to turn the talks over to higher-ranking officials after Kim and his U.S. counterpart, Assistant U.S. Trade Representative Wendy Cutler, failed to reach an agreement in talks last week in Washington.

Their bosses, South Korean Trade Minister Kim Hyun-chong and Deputy U.S. Trade Representative Karan Bhatia, opened the latest effort earlier Monday.

South Korea has said since even before the negotiations began in June last year that it would demand its rice market, which it considers a "sensitive sector," be excluded from any final deal

Besides agriculture, other contentious issues remaining to be solved include trade in automobiles.

If successful, the deal would be the biggest for Washington since the North American Free Trade Agreement in 1993, reports AP.

South Korea is the seventh-largest trading partner of the United States, and the two countries already do more than US$75 billion (EUR56 billion) in trade.