Thursday, September 16, 2021

US-South Korea Free Trade Agreement Derails

US-South Korea Free Trade Agreement: President Donald Trump instructed his assistants to prepare documents on the US withdrawal from the free trade agreement with the Republic of Korea (South Korea). This was reported on Saturday by The Washington Post referring to sources in the US administration.

According to sources, Trump tries to dissuade several leading advisers from such a step, including “Pentagon chief James Mattis, national security aide Herbert McMaster and director of the National Economic Council under the head of state Gary Kon.” Their main argument is that withdrawing from the agreement “could lead to a trade war with Seoul” and “substantially weaken the position of the South Korean government, while the tension caused by ballistic missile tests” that Pyongyang conducts on the Korean peninsula has sharply increased.

Representatives of the White House did not respond to TASS’s request to confirm or deny the newspaper’s message. If Trump still signs the appropriate decree in the next few days, then, according to the provisions of KORUS, his action ends in six months – in March 2018.

Attempts to Review Arrangements

The Free Trade Agreement between the Republic of Korea and the United States was signed in July 2007 and entered into force in March 2012. The parties agreed gradually – within three years – to abolish customs duties for almost 95% of the names of consumer and industrial goods included in the trade turnover between the two countries. Seoul is currently the sixth largest partner in terms of trade in Washington.

Last year, the turnover between them exceeded $ 112 billion. American companies exported goods to South Korea for $ 42.3 billion, South Korean to the US – $ 69.9 billion. Thus, the US deficit in trade with the South Korea was $ 27.7 billion.

During the presidential election campaign, Trump repeatedly criticized KORUS, calling it dishonest and unprofitable for America, which allegedly lost 100,000 jobs because of this. Entering the presidency in January of this year, he ordered to hold negotiations on changing the terms of the agreement and to make it become “more fair”.

In July, the US representative in trade negotiations, Robert Lightheiser explained what displeased Trump. “Since 2012, the trade deficit with the South Korea has doubled, while the volume of exports of American goods is declining, which does not correspond to the picture painted by the previous administration, urging the American people to support the conclusion of the agreement,” he said.

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