South Korea’s top trade negotiator said Tuesday 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.
Speaking after a video conference with U.S. trade representative Robert Lighthizer, South Korean Trade Minister Kim Hyung-chong said Seoul proposed a joint study with Washington to evaluate the impact of the 5-year-old bilateral trade deal and the cause of the U.S. 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.”
Two sides, two views
The two sides found they had different views on the impact of the free trade deal and could not reach any agreement during the talks, he added. Kim said Seoul will be waiting for Washington’s response to its proposal for the joint study.
The countries’ trade officials held their first talks in Seoul, in what Washington hoped would lead to discussing amendment or modification of the trade deal that took effect five years ago under President Barack Obama.
The U.S. trade official said discussions will continue.
“Unfortunately, too many American workers have not benefited from the agreement,” Lighthizer said in a statement posted on the USTR website. “President Trump is committed to substantial improvements in the Korean agreement that address the trade imbalance and ensure that the deal is fully implemented.”
Trade deal and trade deficit
The Trump administration criticized the pact with its ally, saying that the U.S. trade deficit with South Korea had doubled since the deal went into effect. The U.S. trade deficit with South Korea widened from $13.2 billion in 2011 to $27.6 billion last year.
But South Korea said the deal has been beneficial to both 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.
The Trump administration is seeking to renegotiate the trade deal with South Korea as part of its broader efforts to reduce the U.S. trade deficit. It has begun an effort to renegotiate the North American Free Trade Agreement with Mexico and Canada.
South Korea is the sixth-largest trading partner for the U.S., while the U.S. is South Korea’s second-largest trading partner.