Korea overhaul trade deal

Adjust Comment Print

As the push to make trade more fair for the USA continues, President Trump says an agreement in principle has been made with South Korea.

One of the officials said that this deal "underscores a pattern of failure by previous administrations to negotiate fair and reciprocal trade deals that benefit both countries".

The United States and South Korea agreed to revise their six-year-old trade pact with a side deal to deter competitive currency devaluation by Seoul and with concessions for US autos and pharmaceutical companies, Trump administration officials said on Tuesday.

The U.S. side agreed that annual exports of up to 2.7 million tons of South Korean steel products will be exempted from recently announced 25 per cent tariffs. The United States also extended a 25 per cent tariff on South Korean pickup trucks by 20 years, through 2041.

Treasury Secretary Steven Mnuchin discussed the deal and ongoing negotiations during an interview Sunday, saying a negotiation was on the table.

South Korean President Moon Jae-In (R) shakes hands with U.S. President Donald Trump (L) during the joint press conference at the presidential Blue House on November 7, 2017 in Seoul, South Korea.

South Korea also agreed to eliminate non-tariff barriers such as certain environmental testing requirements and recognize USA standards on auto parts, according to the senior administration officials.

South Korea will not receive an exemption on their aluminum exports, the official added, which will be subject to a 10 percent tariff. This is typical behavior, this whole 'using trade as a lever to get a better deal for U.S. corporations.' It's not really about limiting imports to the US. "It's a big deal for our parts manufacturers".

The third-largest steel exporter to the United States after Canada and Brazil, South Korea was among 12 countries whose exports of steel and aluminum Trump recently said would be hit with heavy tariffs.

While U.S. carmakers will be able to ship 50,000 cars to South Korea annually, 25,000 more than before, without being subject to domestic safety regulations no American auto brand sold more than 10,000 vehicles in South Korea previous year.

"It's also about the US penetrating South Korea's automobile markets".

Instead, South Korea will face a quota on its steel exports to the US. -South Korea trade deal under the Obama administration one of the worst in the nation's history. Provisions in KORUS allow the two countries to rework sections of the trade pact without the congressional oversight and consultations required under Trade Promotion Authority as long as there are no changes to USA law.

China responded by suggesting that it would implement tariffs on US goods including apples, steel pipe, and pork. Beyond that threshold, cars shipped from the United States will have to comply with South Korean safety rules, which American companies say put them at a disadvantage. Most U.S. pork products now enter South Korea duty-free, and the tariff on U.S. beef, which has been reduced from 40% to 21.3%, will continue to decline each year until it is eliminated by 2026. However, despite USA officials' promises that the pact would enhance cooperation between the US and Korean governments to resolve food safety and animal health issues that affect trade, South Korea has imposed temporary bans on imports of American poultry in each of the last three years, including 2017. Capital Economics says no Korean automaker exports pickup trucks to the United States at the moment. Including it in the text of the deal would have required a lengthy legislative approval process, a path that administration officials indicated they did not want to go down.