South Korea and the United States agreed Wednesday to begin a process to amend their free trade agreement at Washington's request, Seoul's trade ministry said.
The agreement was reached during talks in Washington led by South Korean Trade Minister Kim Hyun-chong and US Trade Representative Robert Lighthizer, the ministry said in a statement.
|Korean Trade Minister Kim Hyun-chong (second from right) attends a meeting with the US over the fate of the bilateral FTA in Washington on Wedbesday. (Yonhap)|
"The two sides shared an understanding of the need to amend the free trade agreement to further strengthen the mutual benefits of the Korea-US FTA," it said.
In accordance with South Korean law, the ministry will carry out the procedures necessary to begin negotiations for an amendment, including an economic feasibility study, public hearings and reports to parliament, it added.
The announcement marks an accomplishment for US President Donald Trump, who has long vowed to fix trade deals he sees as unfavorable to American businesses and workers.
The Trump administration has blamed the five-year-old agreement, known as KORUS, for the U.S.' growing deficit in goods trade with South Korea. But Seoul has argued the deficit would be larger without the deal and called for a joint review of its impact on the two economies.
Wednesday's meeting was the second round of talks on US demands for an amendment.
The first meeting held in Seoul in August reportedly ended in an impasse. Trump then threatened to terminate the deal but stopped short amid strong opposition from within the White House, Congress and relevant industries, as well as heightened tensions caused by North Korea's Sept. 3 nuclear test.
Speaking to reporters in Washington last week, Kim said he would press for a review before discussing amendments to the deal.
But he also noted the threats of withdrawal were real, not a "bluff."
The US has a deficit of US$27.7 billion in goods trade with South Korea but a surplus of $10 billion in services trade. Since the agreement took effect, South Korean investment in the US has increased from $2.2 billion to $5.8 billion and created 45,000 jobs.
The two sides "held in-depth discussions on our respective issues of interest, and we explained the outcome of our (own) assessment (of the deal's impact)," Kim told reporters after the meeting. "I think it went fairly well."
The assessment showed the agreement's benefits to both countries in terms of expanded trade, investment and market share, and indicated a clear correlation between tariff elimination and increases in South Korean imports of autos, machinery, fine chemicals, and agro and livestock products, according to the ministry.
"Over the long term, we expect to see balanced, economic benefits to both countries based on the South Korea-US FTA," it said.
The top negotiators plan to meet again during Trump's visit to South Korea next month.
The US government is required by law to inform Congress 90 days prior to the start of negotiations on an amendment, meaning the talks could kick off as early as January. (Yonhap)