Korea and the US will soon resume talks to review their bilateral free trade agreement amid intensifying tension over President Donald Trump’s latest decision to impose a high tariff on steel imports.

“The third round of talks on the free trade deal will be held soon and we will set national interest as the top priority,” said Kim Dong-yeon, deputy prime minister and minister of strategy and finance, at a ministerial meeting Monday. 

The upcoming negotiations are expected to include the steel tariff issue in the wake of the Trump administration’s new tariff on steel imports announced last week.

“The steel issue will be discussed in connection with the negotiation of the free trade deal,” said Paik Un-gyu, minister of trade, industry and energy.

Trump appears to want to use the steel issue as leverage in negotiating the free trade deal, offering a possibility of excluding US allies if the trade negotiation satisfies him. Last week, he exempted Canada and Mexico, saying a final decision would be made based on negotiations over the North American Free Trade Agreement.

Some local experts, however, said the trade and steel issues should be handled separately.

“Korea should not put the steel issue on the negotiation table for the trade deal. The steel issue was not originally included in the negotiation agenda,” said Choi Won-mok, a law professor at Ewha Womans University.

If Korea is exempted from the steel tariff at the FTA negotiations, Korea will be in a difficult position not to grant the US a favor, according to Choi.

“Even if Korea is excluded from the steel tariff during the FTA talks, it is not necessarily a good thing because we have to give up something else,” said Koh Joon-sung, a senior researcher at the Korea Institute for Industrial Economics & Trade.

During the second round of talks held at the end of January, the US reportedly called for deregulations on environment standards regarded as nontariff barriers by the US car industry. It also called for increasing the quota of imported cars that do not satisfy the safety standards of Korea.

The US’ move to exclude certain nations from the steel tariff during trade talks is not logical in the first place, as the US said it views the steel issue as a security -- not trade -- challenge, according to Koh.

Meanwhile, local civic groups urged the government not to discuss pharmaceutical issues during trade negotiations.

Pharmaceutical Research and Manufacturers of America said earlier that Korea’s drug pricing policy violates FTA rules and called for Korea to be designated as a priority foreign country. Once a country is identified as a priority foreign country, the US Trade Representative opens a Section 301 investigation, which may lead to some form of trade sanctions.

A joint civic group comprising 16 related organizations sent an official letter to both Trade Minister Kim Hyun-chong and US Trade Representative Robert Lighthizer, saying PhRMA’s claim would increase drug prices and damage the rights of patients.

By Shin Ji-hye (shinjh@heraldcorp.com)