US Vice President: Washington Looking to Upgrade Korea Trade Deal
The US is hoping to launch negotiations with South Korea on upgrading their five-year-old trade deal, also known as the KORUS FTA, according to comments made by US Vice President Mike Pence during a trip to Asia earlier this month.
Speaking in Seoul on 18 April, the US official suggested that doing so could help address areas “where our trade relationship is falling short,” while noting that the two sides do have deep-seated economic ties.
“Our businesses continue to face too many barriers to entry, which tilts the playing field against American workers and American growth,” said Pence to a group of business representatives. He also noted that Washington is looking over all of its existing trade deals to assess their level of benefits to the US economy vis-à-vis its trading partners.
Regarding the KORUS FTA, Pence noted an imbalance in trade, pointing to a “concerning” US trade deficit with South Korea of US$27.7 billion. Along with meeting business officials, Pence also met with South Korean Acting President Hwang Kyo-ahn before continuing on his Asia trip. (For more on Pence’s trade-related meetings in the region, see related story, this edition)
South Korean officials say that a US request to renegotiate the trade deal has not yet been formally submitted, according to comments reported by CNN.
Five years in
The KORUS FTA entered into force in March 2012, following years of negotiations and political wrangling to get the deal approved by each country’s respective legislatures. (See Bridges Weekly, 29 February 2012)
The agreement was originally negotiated and signed on the US side under the administration of President George W. Bush. The deal was later re-opened under President Barack Obama to renegotiate some of the terms, specifically regarding automobiles and beef. Those talks were concluded in 2010, with the deal making its way through both countries’ legislatures the following year. (See Bridges Weekly, 9 December 2010 and 12 October 2011)
According to a fact sheet published by the Office of the United States Trade Representative last year, American exports to South Korea have grown in various areas under the KORUS FTA, including manufactured and agricultural goods, automobiles, services, and intellectual property works.
The USTR figures also suggest that South Korea was the seventh largest goods export market and sixth largest supplier of goods imports for the US last year. In recent years, foreign direct investment has also grown in both directions.
ICTSD reporting; “US to renegotiate South Korea trade pact,” FINANCIAL TIMES, 18 April 2017; “Pence: U.S. trade with Korea falling short and deficit is ‘concerning,’” USA TODAY, 18 April 2017; “Pence says trade with South Korea must change,” CNN MONEY, 18 April 2017.