BLUE HOUSE PREVIEWS U.S.-ROK SUMMIT MEETING: FTA

C O N F I D E N T I A L SEOUL 002674

SIPDIS

SIPDIS

SYDNEY FOR POTUS APEC DELEGATION

PASS USTR FOR CUTLER AND AUGEROT
STATE FOR E, EEB,EAP/K, AND EAP/EB
USDOC FOR DUTTON, CARTER-NIXON AND CHOI
TREASURY FOR IA/OASIA/POGGI
USDA FOR FAS/ITP.CLAUS AND GRUNENFELDER
NSC FOR TONG

E.O. 12958: DECL: 09/04/2017
TAGS: AS EAGR ETRD IN KS PREL
SUBJECT: BLUE HOUSE PREVIEWS U.S.-ROK SUMMIT MEETING: FTA
AND BEEF DELIVERABLES

REF: SEOUL 1127

Classified By: Amb. Alexander Vershbow. Reasons 1.4 b/d.


1. (C) SUMMARY: At the September 7 APEC bilateral summit
meeting in Sydney, President Roh will inform President Bush
that Korea has presented the U.S.-Korea FTA (KORUS FTA) to
the National Assembly for ratification just prior to the
meeting, a key Blue House economic adviser told us September

4. Roh will reaffirm his strong commitment to reopen the
Korean market to U.S. beef as soon as possible and to seek
the KORUS FTA's passage before he departs office on February

25. The official added that President Roh's "if-asked"
talking point on full beef market reopening is to request
reciprocal U.S. actions to obtain similar beef market
openings in Hong Kong, Japan and Taiwan, thereby giving the
ROKG greater political cover. END SUMMARY.


2. (C) September 4, EMBOFFs met again with Presidential
Assistant Secretary for Economic Policy Kim Seung-ho
(strictly protect),the official responsible for preparing
the economic portion of President Roh's briefing book for
this week's APEC Economic Leaders Meeting. Kim is a valued
contact who provided us insights into Blue House thinking on
the KORUS FTA and the beef issue in an earlier meeting
(reftel).

FTA GOING FORWARD AS PLANNED
--------------


3. (C) Kim opened by saying that the FTA was on President
Roh's desk for likely signature today and was slated to go to
the National Assembly (NA) September 6 or 7. Later in the
conversation, Kim said that President will inform President
Bush in their September 7 bilateral on the margins of APEC
that the ROKG has presented the agreement to the NA for
ratification.


4. (C) Kim said the Blue House will continue to push for
ratification in this NA session, ideally by the end of
November prior to December's Korean presidential election. A
second scenario is to ratify after the presidential election
but before the new president takes office on February 26.
The Blue House is still weighing timing, Kim said, and must
decide whether it seems advisable from a political standpoint
to delay a ratification vote until after the presidential
election. However, Kim stressed that President Roh is
seeking ratification in this session, to ensure that the FTA
is regarded as his achievement and not his successor's.


5. (C) Noting that NA elections will follow the Korean
presidential elections, A/ECOUNS suggested that NA
ratification in November appears less complicated. Kim said
the ROKG may opt for that timing. He added that the ROKG
understands that the USG is trying to persuade a vocal
minority not to oppose the FTA, and may wait until there is a
friendly environment in Congress before sending up the FTA.
We recounted ongoing, stepped-up outreach efforts by the
Administration and private sector supporters on behalf of
KORUS FTA.

"READY TO MOVE" ON BEEF, BUT...
--------------


6. (C) We highlighted the resolution of the beef issue as
critical to improving Congressional receptivity to the KORUS
FTA. Kim responded that Korea is ready to open its market to
U.S. beef, but that Korea's ability to do so depends on the
U.S. side. Every time Korea is ready to move, Kim said,
something happens on the U.S. side (i.e., bone or other
materials are found in U.S. shipments that are inconsistent
with Korea's current boneless-only import protocol). Kim
said the ROKG understands that the problems are largely due
to human error, but asked that the U.S. take measures to stop
these -- at least for another two to three months -- because
beef import compliance problems hand FTA opponents an issue
and allow them to become more vocal again.



7. (C) AGATT said the U.S. will be looking for Korea to
accept beef and beef products from animals of all ages. Kim
responded with some skepticism. If Korea immediately moved
to simply adopt OIE guidelines completely with no deviation,
consumers and NGOs would question why the ROKG spent so much
time negotiating on this issue. This is a big issue for
Korea, Kim stressed. Kim said the August 31 change of MAF
Ministers opened a prospect of revising the import protocol
in the next few weeks and reopening the market within two to
three months. The new MAF minister "knows that beef is the
first thing he must think about every morning," Kim said.


8. (C) In phoning a veterinary health contact to find out
whether an August 31 meeting of the ROKG animal health
committee had completed its risk assessment (part of the
roadmap toward revising the protocol),Kim learned and
conveyed to us that another bone had been found in a
shipment. (FYI: The September 4 bone finding was from Swift
plant 969G in Greeley, CO, already suspended since July 31
due to another bone finding, not classified as an SRM. MAF
has already told us they will continue to accept product from
this plant shipped prior to July 30. END FYI.) Kim ended
this portion of the conversation by saying that Korea is
ready to accommodate the U.S. on the beef issue, but "please
pick up those small bones."


9. (C) When the conversation later turned to APEC, Kim said
President Roh will tell President Bush at their September 7
bilat that Korea is ready to address U.S. concerns on beef.
Roh will have an if-asked talking point on beef bones, Kim
said, stressing "please do the same with Korea's neighbors"
such as Japan and Taiwan, if the U.S. wants Korea to revise
its beef import protocol to include all beef cuts and ages.

APEC Issues
--------------


10. (C) Turning to APEC issues, on global climate change,
the adviser described Korea as straddling U.S. and EU
approaches with "a foot in two boats." As a result, the ROKG
would follow the debate and perhaps join a consensus
position, but not take the lead on climate change. On APEC
membership, he said that Korea will join any consensus in
favor of extending the moratorium, and not support a possible
Australian effort on behalf of earlier Indian membership. At
the same time, the ROKG will urge APEC leaders not to defer
the membership discussion indefinitely.

COMMENT
--------------


11. (C) Kim was upbeat about FTA ratification but frank
about potential difficulties in revising the beef import
protocol. It was encouraging to hear that the KORUS FTA will
be submitted to the NA this week, as a deliverable for
President Roh's bilateral with President Bush. On beef, on
the other hand, Kim did not have any viable suggestions for
getting past the current difficulties caused by U.S.
shippers' occasional noncompliance with Korea's import
protocol (which is stringent beyond OIE standards).
Furthermore, he made clear that the ROKG still feels
vulnerable to consumer and NGO pressure if it moves too
quickly to scrap the current beef import protocol. While Kim
stressed that the new MAF Minister understands the need to
resolve the beef issue to facilitate Congressional action, he
indicated that Korea's market might not reopen until
November.
VERSHBOW