US and S. Korean officials fail to reach an agreement on FTA
The Dollar Business Bureau
US and South Korean officials failed to reach an agreement on renegotiating their free trade pact, which was termed by the US President as a ‘horrible deal’ – a Seoul official revealed to the media today.
The Trump administration has been seeking to revise the FTA that was inked under the former President, Barrack Obama, which Trump labelled as a ‘job killer’.
"For many, many years, the United States has suffered through massive trade deficits... we'll be changing that," Trump said during a June 30 summit with new South Korean President Moon Jae-In.
South Korea, which is US’s seventh largest trading partner, on its part has maintained that there is no clear link between the pact and US trade deficit. In a media release, a top South Korean negotiator, Trade minister, Kim Hyung-chong clarified that, “Seoul will not discuss renegotiation of the free trade agreement with the U.S. without first looking into what is really causing the U.S. trade imbalance.”
Kim said that his side has proposed for a joint study with Washington to evaluate the impact that the 5 year old bilateral trade agreement has caused on US trade deficit.
“We did not agree to the unilateral proposal from the U.S. to amend the Korea-U.S. FTA,” Kim told reporters in a briefing after a talk with U.S. trade representatives. “We made our position clear that investigation, analysis and evaluation of the impact of the Korea-U.S. FTA must be preceded.”
Both the sides found that they had differing views on the impact of the trade deal and hence could not reach any agreement. The countries’ officials had held talks in Seoul, in which Washington hoped there would be discussions to amendments or modification of the free trade deal agreed to 5 years ago.
The Trump administration pointed out that US Trade deficit with South Korea, ‘had nearly doubled since the deal went into effect.’ The US trade deficit with South Korea widened to $27.6 billion in 2016 from $13.2 billion when it was inked in 2011.
South Korea refuted the Trump administration’s allegations and said that the deal has benefited both the countries. ‘The U.S. runs a trade surplus with South Korea in services such as banking and tourism, estimated at $10.7 billion in 2016.’
South Korea also believes that the FTA is not the cause of the U.S. trade imbalance, and that other, complex factors in the global economy are to blame.
Concerned with the ever-growing trade deficits with various countries, US is seeking to renegotiate its trade deals with various countries. Efforts are on to renegotiate the North American Free Trade Agreement (NAFTA) trade deal with Mexico and Canada.