The Korea-US summit in Washington last week finished with ambiguous statements from both sides as well as President Trump expressing his intent to renegotiate the current Korea-US Free Trade Agreement. In light of the circumstances, the Moon administration is expected to prepare a FTA task force for what is looking to be an intense economic showdown between the two nations.
President Moon Jae-in proposed the launch of a consultation task force to investigate, analyze and evaluate the impact of the Korea-US FTA during his recent trip to the White House, according to the government Monday.
Despite differing views regarding the mutual benefits of the FTA, both US and Korean leaders discussed the formation of a bilateral consultation task force to further scrutinize the international trade deal by both parties during the summit.
On Friday, White House spokeswoman Sarah Huckabee Sanders announced that US Trade Rep. Robert Lighthizer was calling for a special meeting in order to “start the process of renegotiating and amending the deal,” adding that President Trump intends to get the best deal, and a better deal if possible, when it comes to trade.
The US’ main motivation for launching a task force appears to be as a preliminary process for initiating trade renegotiations, especially following Trump’s announcement over the weekend that the two nations were already in the midst of renegotiations -- claims that were denied by Moon.
On the other hand, Korea’s task force is slated to deliberate whether the Korea-US FTA is actually disadvantageous to the US, according to news reports.
Trump blames the FTA for deepening the US trade deficit, saying the country’s trade shortcomings with Korea has increased more than $11 billion since the deal.
The US Department of Commerce is soon expected to release its report on current trade deficits standing among 16 countries, including South Korea. The report is also likely to contain areas of disadvantages among trading partners, which is expected to be used by the US government in its efforts to highlight trade disparities between the two countries.
Meanwhile, the Korean government says US’ trade imbalance claims are misleading. Based on figures by local government bodies, the bilateral deal not only suggests mutual benefits by both parties, but can also argue the US benefits disproportionately.
Moon previously stated US officials emphasized the country’s trade deficit in the auto and steel industries during the summit talks regarding trade between the two nations. However, according to data compiled by the Ministry of Trade, Industry and Energy, the US automobile import growth rate of 37.1 percent since the enactment of the FTA is nearly three times higher than the Korean automobile export growth rate of 12.4 percent.
As for steel, data shows China’s steel exports to the US via South Korea account for only 2 percent of Korea’s total steel exports.
By Julie Jackson (email@example.com