South Korea says unclear if FTA is cause of trade imbalance

Kristopher Drake
July 14, 2017

A South Korean trade official confirmed to Reuters news agency on Thursday that the proposed joint committee will meet either in Seoul or Washington, but the talks don't necessarily mean that South Korea will renegotiate the deal.

"A key focus of the Trump Administration is on reducing our trade deficits with trading partners around the world, and we have real concerns about our significant trade imbalance with Korea", he added.

South Korea's trade ministry said in a statement that it will dispatch a senior official to the United States, but stressed the need to "investigate, analyze, and evaluate" the free trade agreement and its impact on the trade deficit before taking any further action.

USTR Robert Lighthizer made the notification in a letter to South Korean Trade Minister Joo Hyung-hwan, calling for the convening of "a special Joint Committee meeting under the US-Korea Free Trade Agreement to start the process of negotiating to remove barriers to US trade and consider needed amendments to the agreement", the office said in a statement.

The ministry said it would like to delay the meeting since the post of chief trade negotiator for Korea is vacant due to the delay in appointments by the new administration of Moon Jae-in. In particular, "The special joint committee can consider an amendment to the KORUS FTA or revise the agreement and interpret provisions", the USTR added.

According to reports, the US-Korea Free Trade Agreement (KORUS) became law in March 2012.

SEOUL, South Korea (AP) - A South Korean Foreign Ministry spokesman has responded to a US request for talks on the two countries' free-trade agreement by saying it's unclear if the pact is causing a growing imbalance. Trump in a press conference after his first summit talks with Korean President Moon Jae-in late last month said the two sides would embark on renegotiation and previously called the bilateral FTA a "horrible deal". The figure rose to $23.2 billion past year. That year, the United States trade deficit with South Korea was $7.7 billion while it was $17.6 billion last year.

That means that had it not been for the deal, the U.S. trade deficits would have been larger.

Korean and USA statistics on the trade deficit differ for a number of technical reasons. The issue topped the agenda at a meeting between involving cabinet members from the two countries, including Lighthizer, U.S. Vice President Mike Pence and Commerce Secretary Wilbur Ross.

The trade surplus amounted to $8.16 billion during the first six months of the year, down 37.9 percent from the same period the previous year. The automotive sector, including autoparts, accounts for 80% of the trade imbalance, according to Ahn Duk-geun, a professor of global trade law at Seoul National University.

Other reports by Ligue1talk

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