S. Korea, US trade deal

South Korea will spend more than $140.3 billion through 2013 to compensate for losses to farms and fisheries stemming from a free trade deal with the US, the government said.

South Korean and US trade officials are expected to sign today a free trade deal they struck in April that studies say could add $20 billion to their more than $70 billion a year trade, despite last-minute changes sought by Washington.

The assistance will in part be used to compensate for 85 per cent of losses suffered by farmers when markets open up to US goods and to encourage them to quit farming by paying three years worth of income.

The government will also subsidise work to improve agricultural productivity and encourage switch to higher value crops.

South Korea also said it would spend another one trillion won over the next 10 years to support its pharmaceutical sector and billions of dollars more to aid industries that are expected to be hurt by US exports.

US and South Korean negotiators held two rounds of talks in the past week on adding new labour and environment provisions into what would be the biggest US trade deal in 15 years.