South Korea rejected a US proposal to revise a five-year-old bilateral trade deal that US President Donald Trump has called a “job killer.”
“The US asked for resolution of its trade imbalance, full implementation of the existing FTA [free-trade agreement], and modification and amendment of the current deal,” South Korean Minister for Trade Kim Hyun-chong told reporters in Seoul yesterday after speaking with US Trade Representative Robert Lighthizer via video-conference, followed by talks with US officials in the South Korean capital.
“We told the US that it’s necessary to figure out the reasons for the trade imbalance through a joint study to research, analyze and assess the effect of the FTA,” Kim said. “From my point of view, there’s no agreement regarding negotiations” to revise the deal.
No date was set for a future meeting on the issue, Kim said.
The agreement could be terminated if either nation said it wanted to do so. That process would take 180 days.
In June, Trump told South Korean President Moon Jae-in that US automakers a should have a “fair shake” for better car sales. Kim said last year that the deal was a “slam dunk-shot” for the US.
South Korea describes the United States-Korea Free Trade Agreement (KORUS FTA) as a mutually beneficial deal, basing its argument on a surge in bilateral trade volume.
However, the US sees it as one of the main reasons for the trade imbalance.
Trump’s push to revise the deal is part of his broader drive to reduce his nation’s trade deficits with various nations, such as his pursuit of a full renegotiation of the North American Free Trade Agreement. Countries such as Japan that have large trade surpluses with the US are watching on with interest.
The trade issue has emerged just as the US and South Korea need each other’s support to fight together against North Korea’s nuclear threat. KORUS also helps the US on a strategic level as China’s economic and political influence grows in the region.
South Korea is the US’ seventh-largest trading partner, while the US is South Korea’s second-largest partner after China. US figures indicate its goods deficit with South Korea was US$27.7 billion last year, or about US$4.4 billion more than the figure South Korea calcualted.
Trump, in an interview in April, had branded the trade agreement a “horrible deal” and indicated he would renegotiate or terminate the accord.
Last month, Washington issued a request to convene a special session of the Joint Committee under the KORUS to negotiate amendments to the trade pact.
Seoul maintains that the deal has been mutually beneficial.
South Korea has also said it needs to be established whether the US deficit is a result of other structural issues in US industries.
The bilateral accord was initially negotiated during then-US president George W. Bush’s administration in 2007, but that version was scrapped and renegotiated by then-US president Barack Obama’s administration three years later.
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