Seoul: Correlation Between KORUS FTA, Trade Imbalance Should Be Reviewed First

Marie Harrington
July 14, 2017

The meeting would work to remove barriers to United States trade and consider needed amendments to the 2012 agreement.

The Trump administration has informed South Korea that it wants to renegotiate their five-year old free-trade agreement.

"We will clarify its position to check whether or not the Korea-US FTA is the cause of the trade imbalance between the two countries by jointly investigating, analyzing and evaluating the effects of the Korea-US FTA, as we proposed during the Korea-US summit at the end of June", said the Ministry of Trade, Industry and Energy, adding, "The US government is now asking not for a renegotiation to review and change the whole agreement from the beginning, but for starting negotiations to decide whether to revise the agreement, a Korean government official explained".

Lighthizer, the U.S. trade representative, said the announcement requires the two nations to meet within 30 days to discuss an agenda for renegotiation.

The move to revamp the 5-year-old deal doubles down on Trump's promise to get tough on trade and lower the USA trade deficit.

U.S. Trade Representative Robert Lighthizer argues the opposite has been the reality, with exports to South Korea also taking a hit in the intervening years.

Lighthizer called for a committee meeting on the subject within thirty days.

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Specifying the trade status of the two countries, Moon also reportedly said, "In the past five years since the FTA was effectuated, our auto exports to the U.S. in fact decreased. But our clear position is that the KORUS FTA can not be the cause for the US' trade deficit from Korea and that we should check and review this together with the US". While Lighthizer's letter was sent to Seoul's current minister of trade, industry and energy, the current administration is trying to establish a new trade negotiations office, headed by a new trade minister via a government reorganization.

"We will send a senior official to the United States and discuss detailed schedules and agenda items with the USTR", it added.

During an early July meeting with South Korean President Moon Jae-in, Trump said he wanted to renegotiate what he called a "rough" trade deal between the two countries.

Trump kicked off the discussion by saying his administration wants a deal "that's fair for the USA and fair for South Korea".

The data also showed that exports of American vehicles to Korea increased 20 times faster than U.S. automobile exports to the world over the same period, meaning Korea now stands as the United States' eighth-largest export market by value, up from the 17th-largest market in 2011.

The U.S. runs a trade surplus with South Korea in services such as banking and tourism.

"It's imperative that we work together to ensure that the economic partnership between our two countries is not only strong and vibrant, but also fair, and that the KORUS Agreement benefits the US economy as much as it does that of Korea", he said.

Other reports by TheSundaySentinel

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