Presidential Office Welcomes Results of S. Korea-US Trade Negotiations

Saul Bowman
March 28, 2018

In April, Trump told Reuters he would either renegotiate or terminate what he called a "horrible" trade deal that has doubled the United States goods trade deficit with South Korea since 2012. Reducing South Korean non-tariff barriers to USA automotive exports has been a priority for the Trump administration.

South Korea's steelmakers rose on Monday, with market heavyweight Posco leading the overall sector after the United States agreed to exempt South Korea from its new steel tariffs.

While negotiations were underway, Washington granted a temporary deferment to seven countries, including South Korea, on steel import restrictions.

Under the deal, the United States would be allowed to export 50,000 vehicles annually to South Korea without meeting local safety requirements - double the current number.

On steel, South Korea accepted an annual export quota of 2.68 million tonnes to the USA, 70 per cent of its average shipments in the past three years.

The two countries reached an agreement "in principle" on the trade deal known as Korus, South Korea's trade ministry said in a statement Monday. President Donald Trump's administration wants to reduce the bilateral trade deficit, which totaled $27.7 billion in 2016, according to the office of the US Trade Representative (USTR).

Under the pact, Seoul will further open its auto market to United States manufacturers, while accepting a 20-year extension until 2041 to a 25 percent USA tariff on Korean pick-up trucks.

Japan, along with China, was not granted a reprieve.

The disagreement threatened to drive a wedge between the two allies as Moon prepared to meet Kim next month, an encounter that Trump needs to pave the way for his own proposed summit with the North Korean leader.

South Korea's trade minister Kim Hyon-chong speaks during a briefing at the Foreign Ministry in Seoul.

Seoul is the third-largest steel exporter to Washington.

The South Korean trade minister said the USA side focused on the auto sector as vehicle and auto parts accounted for 74 percent of South Korea's surplus in trade with the United States in 2017. S. Korea will also consider the USA standards when it revises its standards.

A girl holds a banner during a rally demanding peace on the Korean Peninsula near United States embassy in Seoul, South Korea on Saturday.

Trump's hardcore support may be disappointed that he has already begun granting exemptions to his protectionist policies, but close ties between the US and South Korea are of particular importance at this moment in time.

Kim said no auto makers previously exceeded the 25,000-vehicle threshold a year.

The revised agreement appears like significant concessions by South Korea but is expected to have little impact on its exports to the United States or its domestic auto market.

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