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US trade deficit would be ‘significantly higher’ without KORUS FTA: Overby

Amid ambiguity regarding the US President Donald Trump administration’s vow to alter certain terms of the Korea-US Free Trade Agreement, Tami Overby, senior vice president for Asia at the US Chamber of Commerce, reiterated her stance that the trade deal continues to be mutually beneficial to both nations.

“What the Korea-USA FTA provides to American companies in Asia is a launching pad,” Overby said during an interview with Yonhap News Agency on Tuesday.

“US businesses believe the Korea-USA FTA is working well,” she added. “The US only has three trade agreements in Asia, and recently withdrew from the Trans-Pacific Partnership, which makes the KORUS FTA even more important.”

Tami Overby, senior vice president for Asia at the US Chamber of Commerce (Yonhap)
Tami Overby, senior vice president for Asia at the US Chamber of Commerce (Yonhap)

US President Trump has publicly lambasted the trade deal as being more beneficial to Korea than the US, claiming that the FTA is to blame for America’s deepening trade deficit.

However, according to Overby, Washington’s losses would have been “significantly higher” without the current trade deal, arguing the current deficit does not take into consideration investment by Korean firms in the US.

“Part of the reason we have a deficit is that the Korean economy has slowed down and there’s a global recession,” she said, adding that the US’ deficit is not necessarily linked to trade between the two economies.

Overby also said that although the trade agreement is in no way perfect, she still considers the FTA as performing its job properly and credits the deal for propelling Korea to become a desirable investment economy in Asia for American firms.

“When I first came to Korea in the late 1980s, South Korea was viewed as a very difficult place to do business for American companies. And the KORUS FTA has really smoothed it out,” she added. “On the regulatory side, we have seen Korea’s regulation become more clear, transparent, and predictable. The agreement created mechanisms that allow us to handle disputes.”

The US Chamber of Commerce is also expected to soon launch its KORUS Works promotional platform in an effort to further emphasize its stance on the benefits of the FTA, amid a pending special session between Washington and Seoul to discuss terms of the deal.

US Trade Representative Robert Lighthizer sent the Korean government a formal letter of request on July 12 to convene in Washington for a special session on the FTA within 30 days.

Seoul’s Trade Ministry later countered Washington’s offer, asking to postpone the meeting until its new government has been restructured and suggesting Seoul as the venue for the session. An official date and venue for the meeting have not yet been set.

By Julie Jackson (