BUSINESS

‘Seoul expected to limit amendment talks in FTA showdown’

By Julie Kim Jackson
  • Published : Aug 21, 2017 - 15:58
  • Updated : Aug 21, 2017 - 18:34

Seoul is expected to play defense against the United States’ push to utilize the two nations’ upcoming special joint committee meeting to discuss possible amendments to the bilateral free trade agreements, by limiting talks regarding trade modifications, local experts said Monday.

The capital is gearing up to play host to a Korea-US Free Trade Agreement joint session at the request of the US Trade Representative Robert Lighthizer, at the Lotte Hotel on Tuesday. Although the US Trade Representative has made clear his intentions to address the “significant trade imbalance” between the two parties and possible amendments to the current Korea-US FTA as part of President Donald Trump’s “America First” agenda, the Korean government remains firm in its stance that it will be utilizing the session only to objectively analyze the possible causes of its counterpart’s deficit.

(Yonhap)

“The whole issue of where to hold the meeting seems merely procedural. Even if the joint committee meeting were held in the US, it cannot go beyond the issues that the joint committee is authorized to discuss under rules governing the joint committee,” Kim Jong-bum, international trade law professor at Yonsei University, told The Korea Herald.

“Nevertheless, Korea’s insistence on having the meeting in Seoul reveals Korea’s intention to limit the joint committee discussions to implementation issues,” Kim added. “The US may want to go beyond the implementation issues and pry open the possibility of modifying the treaty. However, by having the meeting in Seoul, Korea is not giving the impression that it is caving into the US pressure when the rules clearly favor Korea’s position.”

Although representatives of Seoul and Washington have met every year since the establishment of the Korea-US FTA five years ago, Tuesday’s special session has drawn wide speculation that the US and Korea will enter an FTA showdown if the topic of modifying trade terms comes up. The meeting has been garnering widespread attention with members of the media referring to the clash over the FTA through the metaphor of the US spear against the Korean shield. 

Local experts are expecting Washington to use the KORUS joint committee to push Seoul into considering modifying aspects of the agreement, following US President Donald Trump’s numerous public statements branding the FTA as unfair and a cause of the US’ deepening trade deficit.

The US is expected to emphasize that the Trump administration has strongly demanded revisions to the agreement. According to a USTR press release on Friday, the upcoming special session for the US it meant to “consider matters affecting the operation of the KORUS Agreement, including possible amendments and modifications to resolve several problems regarding market access in Korea for US exports and, most importantly, to address the significant trade imbalance.”

The Korean government, on the other hand, has repeatedly stressed that it will emphasize its stance that both countries benefit from the FTA, with some experts predicting Seoul to try to limit all discussions to analysis of facts and figures of the trade deals.

When the USTR originally requested to hold the upcoming special session in July, the US requested the meeting be held in Washington. However, Korea’s Trade Ministry countered the request asking for the session to be held in Seoul, as per the stipulations of the FTA.

According to Korea’s Ministry of Trade, Industry and Energy, US Trade Representative Lighthizer will not attend the joint meeting, rather USTR Chief of Staff Jamieson Greer and Michael Beeman, assistant US trade representative for Japan, Korea and APEC, are slated to take part in the special session as representatives for the US.

Tuesday’s joint committee meeting will also be the first test for Korea’s newly appointed chief trade negotiator Kim Hyun-chong, who took office on Aug. 4.

Kim is a trade expert who led negotiations on the Korea-US FTA nearly a decade ago.

Tami Overby, senior vice president for Asia at the US Chamber of Commerce, referred to Kim as “one of the smartest trade negotiators alive.” But the country’s top negotiator has drawn criticism for his “pro-business attitude” and the alleged pro-US stance he took during initial negotiations on the FTA with the US. His critics fear this give the US a slight upper hand in the upcoming trade talks.

In his inauguration speech earlier this month, Kim emphasized that he would take an aggressive stance, rather than a defensive approach, when it comes to trade negotiations He stated trade policy officials need to, “abandon their passive and defensive goalkeeper attitude” and become more strategic in order to prevent negotiating partners from predicting their next move.

By Julie Jackson (juliejackson@heraldcorp.com)