Korea and the US officially announced Wednesday that they have reached an agreement in principle to the revision of their bilateral trade deal, including an exemption of tariffs on Korean steel, ending three months of talks.

The joint statement released by South Korean Trade Minister Kim Hyun-chong and US Trade Representative Robert Lighthizer read, “Today, Minister Kim and Ambassador Lighthizer are pleased to announce that Korea and the US have reached an agreement in principle on the general terms of amendments and modifications to the free trade agreement between the two nations.”

The renegotiation of the deal started in January after US President Donald Trump’s administration called for a revision in June last year on grounds of the nation’s growing trade deficit with Korea.

“The revised agreement addresses issues related to investment, tariffs, trade in automobiles, and trade remedies. Additional progress was made in the areas of pharmaceuticals, customs and textiles to smoothly implement the bilateral deal,” the statement said.

The key revisions of the deal include a 20-year extension of the 25 percent tariff on Korean-made pickup trucks and doubling of the import cap on US-made automobiles that meet US specifications to 50,000 per manufacturer per year.

The two nations also agreed on terms for an exemption for Korea from tariffs imposed on steel imports under Section 232.

Section 232 is the US law that allows safeguards on imported products on the grounds of national security. The law, which had gone unused for decades, has come to the fore in recent months after Trump said it could be invoked to protect the nation’s steel industry.

Korea, in return, agreed to cut its steel exports volume by 30 percent. The arrangement with respect to steel products is expected to take effect on May 1, 2018.

The two governments also said negotiators are finalizing the terms of the negotiations, which are subject to domestic procedures in both nations before provisions can be brought into force.

Separately from the statement, Reuters reported Wednesday that Korea and the US made a side deal to deter competitive currency devaluation by Seoul as part of the trade deal, citing Trump administration officials.

The side deal requires Korea to provide increased transparency of its foreign exchange interventions, with commitments to avoid won devaluation for competitive purposes, according to the media outlet. The move is seen as an effort by the US to eliminate attempts by Seoul to lower its currency rates and expand exports.

The government denied the report, saying the currency issue is not related to the free trade deal and was not discussed during trade talks with the US trade representative.

The Finance Ministry, instead, said, “We have frequent dialogues with International Monetary Fund and the US Secretary of the Treasury for foreign exchange issues including exchange rate reports. The currency issue is not related to the free trade deal.”

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