Gov’t sanguine about Pence’s criticism of FTAKorea’s deputy prime minister for the economy said U.S. Vice President Mike Pence’s comments on the two countries’ free trade agreement were in line with government expectations.
“It can be interpreted as an overall review [of the U.S. government of its trade negotiations] in regard to the trade barrier report that is expected to be released at the end of June,” Yoo Il-ho, who is also finance minister, said Wednesday. “The U.S. government has not yet made an official request to discuss the Korea-U.S. [Korus] FTA.”
Yoo said that even if the U.S. wants changes to the agreement, he suspects it won’t be anytime soon as the Donald J. Trump administration will be preoccupied with the North American Free Trade Agreement (Nafta).
Yoo stressed that he has not yet scheduled a one-on-one meeting with his U.S. counterpart during the G-20 meeting of economic minsters and central bank governors scheduled to be held in Washington later this week, or with China, which is retaliating against Korea economically for the deployment of a U.S. missile shield.
“We have no schedule of a bilateral meeting either with the U.S. or China,” Yoo said. “[But] we will continuously explain our efforts to reduce the current account surplus from trade with the U.S. while also trying to reduce the economic impact of Thaad [Terminal High Altitude Area Defense] with China.”
Yoo’s comments came after Vice President Pence took issue with the trade pact and market access for American companies in a speech at the American Chambers of Commerce in Seoul on Tuesday. While acknowledging the increase in trade since the agreement went into effect five years ago, Pence said trade imbalances remain a concern for the U.S.
“Despite the strong economic ties between the United States and South Korea, we have to be honest about where our trade relationship is falling short,” Pence said. “Most concerning is the fact that the United States trade deficit with South Korea has more than doubled since Korus came into effect.
“That’s the hard truth of it.”
Pence said there are too many entry barriers to American businesses, which harms America’s workers and its economic growth.
“President Trump has made it clear that the United States will pursue an ‘America First’ policy in trade and exchange. And that will be true in all of our trade relationships, including Korus.”
Pence said that the U.S. government is reviewing all of the trade agreements so that it could “ensure” they benefit not only its trading partners but also the American economy.
“We will work with you toward that end as we reform Korus in the days ahead,” Pence said. “The truth is a stronger American economy means a stronger economy for South Korea and for all of our trading partners.”
Recently the U.S. Treasury Department released a report that did not label Korea a currency manipulator. But it continues to keep Korea on its watch lists along other major trading partners including China, Japan and Germany.
In a recent interview, Trump again stressed that the U.S. dollar continues to remain too strong, which affects exports.
Meanwhile, Yoo said Wednesday that although the Korean economy is showing signs of recovery, including healthy growth in the first quarter, it is too earlier to be optimistic.
To help the economy, the government plans to use 10 trillion won ($8.77) over three years to support start-ups and small and midsize businesses. Some 2 trillion won will be used to help people start businesses, 7.4 trillion won to sustain and expand such businesses and 700 billion won to recoup investments and help those who have failed.
BY LEE HO-JEONG [firstname.lastname@example.org]