The discussions, which have been ongoing during the last ten months, resulted in agreements over a number of issues, particularly relating to food, creating the most significant trade pact between the two nations since 1992. As a result, food and beverage companies in the countries are expected to reap the benefits of strong growth both in terms of trade and economy. Though the measures still need legislative approval, the agreement saw substantial comprises from both sides. Crucially for South Korea, its insistence that it would not open up the country's lucrative rice markets paid off, as the US reluctantly relented on the issue. The US also agreed in principal to accept goods produced at an industrial park just past the North Korean border, belying wider tensions with Pyongyang regarding its nuclear ambitions. The agreement will also see South Korea phase out a 40 per cent tariff imposed on US beef over a fifteen year period. The tariffs had been put in place follwoing concerns of the presence of some outlawed materials being found in meat supplies in recent years. Finalising the agreement has been especially important to South Korea, which has become increasingly reliant on imports of raw materials to meet increased demand resulting from growing commercial interests . Kim Hyun-chong, the South Korean trade minister praised the breakthrough in talks which he saw as the most significant bilateral breakthrough with the US since 1953's military alliance. The Federation of Korean Industries has also added its backing to the measures, which it says are an important step in South Korea's industrial evolution. The agreements came according to analysts just minutes before a "fast track" proposal offered by US President George Bush was set to expire. The "fast track" scheme allowed the discussion proposals to be sent to the US senate for a simple yes/no vote, free from further amendments. The negotiations have not been without their controversies, however, often meeting with disproval and protest from the South Korea's agricultural workers and representatives, which at times have spilled into violence. Korean farmers are particularly concerned that an abolition of tariffs on US goods will see a glut of their agricultural produce flood the market and destroy competitiveness within the country's food industry as a whole. Yet despite all the differences still between the countries over agricultural trade, US imports are becoming undeniably more important to the South Korean food industry. A report published last year for the USDA's Foreign Agricultural Service, estimates that the country now imports 60 per cent to 70 per cent of its total agricultural needs. "U.S. suppliers have a strong opportunity to export raw materials and ingredients for food processing in South Korea," stated the report. "The country's food and beverage manufacturing and processing industry is a major user of imported raw materials, intermediate products, ingredients, and additives. "Imports are necessary because domestic production cannot meet demand." This demand is in part being driven by growing consumer expenditure on food products. According to statistics by consumer analyst Euromonitor, South Korea is expected to spend $54bn (€41bn) on food products in 2007, from $52bn (€39bn) in 2006.
South Korea and the US have finally come to an agreement over free trade talks just hours before a deadline to fast track the measures was set to expire.