Coping with U.S. trade pressureU.S. President Donald Trump’s “America First” policy bodes ill for Korea Inc. Over the long Chuseok holiday, the U.S. administration has mounted trade pressure on Korea, as seen in its invitation of Seoul’s trade ministry officials Wednesday and an agreement to renegotiate the free trade agreement between the two countries. The next day, the Trump administration hinted at the possibility of enforcing a safeguard on Korean washing machines.
The United States cites a “breakup of interest balance.” The Treasury Department asserts that Korea’s trade surplus increased to $23.2 billion last year from $11.6 billion in 2011, the year before the bilateral trade pact went into effect. But Washington turns a blind eye to America’s remarkable trade surplus in the services sector, which soared to $14.1 billion from $10.9 billion during the same period. Our Trade Minister Kim Hyun-chong must do his best to refute Washington’s lopsided arguments.
Kim must take his visit as an opportunity to correct poisonous clauses of the deal, including investor-state dispute settlement, activation of a safeguard and levying antidumping duties. The U.S. International Trade Commission has already imposed a maximum 40 percent tariff on Samsung and LG Electronics’ washers after accepting complaints from their U.S. counterpart Whirlpool. Minister Kim must convince Washington of the inevitable damage on U.S. customers, given their 31 percent market share in the United States.
Korean carmakers will likely suffer after their gains rose to $16.3 billion last year from $8.3 billion in 2011. Damages are unavoidable if tariffs are revived. The Korea Economic Research Institute expects car exports to the United States will decrease by up to $17 billion in the next five years, costing 154,000 Korean jobs. A renegotiation may also create pressure on over 500 agricultural products, including U.S. rice and beef, which were exempted from — or not fully covered by — the trade pact.
The Korean government has been looking at the alarming developments with its arms folded despite Trump’s threat to scrap the trade deal in the campaign. President Moon Jae-in and the ruling Democratic Party opposed the Korea-U.S. FTA in the past. They must do their best to protect our national interest in the upcoming renegotiation.
JoongAng Ilbo, Oct. 9, Page 26