South Korea rejects 'one-sided' U.S. demand on trade pact

Marsha Scott
August 23, 2017

South Korea has maintains the two sides must first determine whether the trade deficit the US holds with South Korea was caused by KORUS or other fundamental economic issues.

Washington's proposal is in line with the "America First" policy of US President Donald Trump, who has long urged a modification of the free trade agreement with South Korea.

The top trade officials for the U.S. and South Korea concluded the first phase of their effort to explore possible changes to their bilateral trade agreement Tuesday, with U.S. Trade Representative Robert Lighthizer vowing to carry the process forward over the next several weeks.

"The United States counterpart said its deficit rose by 200 percent after the two countries signed the free trade agreement but we said that is not because of the deal and presented various objective research data", said Trade Minister Kim Hyun-chong.

But South Korea said the deal has been beneficial to both countries.

In his inauguration speech in early August, Kim said that South Korea would pursue a "balance of interests" in any trade deal.

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And Tami Overby, senior vice president for Asia at the U.S. Chamber of Commerce, said the U.S. trade deficit would have widened even more had it not been for the pact. 'The U.S. runs a trade surplus with South Korea in services such as banking and tourism, estimated at $10.7 billion in 2016'.

"The US cited that their trade deficit has doubled since the FTA came into effect and stated the current terms of the Korea-US FTA needed amending or modifying sometime in the near future", Kim continued. South Korean vehicle exports to the USA last year, however, were 10 times higher at $16 billion.

South Korea refuted the Trump administration's allegations and said that the deal has benefited both the countries.

While Trump has promised to reduce the total trade deficit, most likely by seeking protections for American automakers, experts argue a renegotiated KORUS won't bring jobs back to America.

Korean researchers who monitor trade with the US say Washington may want to make tweaks to Korus FTA, rather than conducting a deep negotiation, given the conflicting interests of individual industries.

Ahn Dukgeun, a professor at Seoul National University's Graduate School of International Studies, said South Korea can take cues from the Nafta talks, though he said Mr. Trump's threat to pull out of Korus FTA might not work.

Other reports by MaliBehiribAe

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