US Vice President Mike Pence’s official remarks that Washington would review the 5-year-old bilateral trade deal between South Korea and the US may be only confined to a partial review of trade terms in certain industries, experts said Tuesday.
Earlier in the day, Pence said the US trade deficit with Korea has more than doubled in the five years since the Korea-US free trade agreement began in 2012.
“That’s the hard truth,” the visiting vice president said during a speech at a gathering of US business executives operating in Korea and Korean business executives investing in the US at the American Chamber of Commerce in Korea in Seoul.
“Our businesses continue to face too many barriers of entry which tilts the playing field against the American workers and American growth. We are reviewing all of our trade agreements across the world to ensure they benefit our economy as much as they benefit our trading partners.”
He added that the US government would “reform the KORUS (FTA) in the days ahead.”
It was the first time a high-ranking US government official had made a public comment about the possibility of a renegotiation of the Korea-US FTA since US President Donald Trump took office.
Trump had said in his presidential campaign that he would pursue an “America First” policy in trade and make adjustments to the terms of the free trade deal with South Korea, which he said was killing US jobs.
Experts were cautious over the degree to which the US would demand a reform of the FTA with Korea.
“While it’s obvious that the US is trying to make the deal more advantageous to them, the review of the FTA could be negative for the Korean economy (compared to maintaining it). Korea’s auto exports, for example, could be hit if the US raises tariffs in the auto sector,” Yim No-jung, an analyst at Yuhwa Securities, said.
“But I don’t think the US would want an overhaul of the trade deal. Rather, it will be a partial one, even though I’m not sure exactly which sector they would want to renegotiate.”
An industry official, who attended the AMCHAM meeting and listened directly to Pence’s speech, said he considered Pence’s remarks as just rhetoric.
“His talks were more focused on the benefits of the FTA with Korea, how it boosted bilateral trade and Korean investment in the US,” the official said on condition of anonymity.
“He was talking to US business people, not to the Korean government at a negotiation table.”
Pence said that since the Korea-US FTA went into effect, the US’ goods and services exports have increased by more than 6 percent, and service exports alone have risen by almost 30 percent to a record high of $21.6 billion. South Korea is the sixth-largest trading partner for the US.
Jeong Hye-sun, a researcher at the Institute for International Trade, a research unit of the Korea International Trade Association, also shared the view of the industrial official.
“Pence’s comments (on the FTA) are nothing new and similar to those by Trump. It is too premature to worry about the impact. We will keep monitoring the developments though,” she said.
A government official in charge of trade with North America at the Trade Ministry was not available for comment.
By Kim Yoon-mi (email@example.com)