Rhetoric shows softening of stance on FTAU.S. President Donald Trump mentioned the word “trade” three times in his 35-minute speech at the National Assembly on Wednesday, but did not criticize the bilateral trade agreement between his country and Korea - which he has long criticized as “unfair” and responsible for the U.S trade deficit with Seoul.
Trump’s going easy on the Korea-U.S. free trade agreement on his two-day visit led to speculation that he has softened his stance on the five-year-old deal, which he seriously considered terminating earlier this year.
In the much anticipated speech at the chamber, Trump used the word “trade” three times. In one instance, he said, “We had productive discussions on increasing military cooperation and improving the trade relationship between our nations on the principle of fairness and reciprocity.”
That was as far as he went in addressing any renegotiation of the trade deal. In one other instance, he talked about trade’s role in Korea’s economic development, saying that Korea’s trade “has increased 1,900 times” from 1960 to the current day. He also called on the international community to “sever all ties of trade and technology” with North Korea for its continued nuclear and missile programs. On Tuesday, too, he gave a measured remark on the trade pact.
Referring to a decision reached by the two sides to begin renegotiations on the trade deal, the hotel mogul-turned-president said he felt “confident that we’ll be able to reach a free, fair, and reciprocal trade deal.”
He thanked President Moon Jae-in “for instructing his trade negotiators to work closely with us to quickly pursue a much better deal.” Though Trump called the current trade deal, which went into effect in March 2012, “quite unsuccessful and not very good” for the United States, Trump’s comment was seen as an indication that he embraced a soft approach on the issue.
Trump appeared to have been swayed by Seoul agreeing to purchase U.S. weaponry worth “billions of dollars.” Trump said Seoul’s arms purchases would create jobs in the United States and reduce its trade deficit with Korea.
“South Korea will be ordering billions of dollars of that equipment, which, frankly, for them makes a lot of sense. And for us, it means jobs; it means reducing our trade deficit with South Korea,” he said during a joint press conference Tuesday.
“They’ll be ordering billions of dollars’ worth of equipment, and we’ve already approved some of those orders,” he continued.
Later Tuesday, a senior Blue House official told reporters that the two leaders never brought up “FTA termination-related words” during their talks.
In a report submitted to the National Assembly in early October, Korea’s Trade Ministry said the Trump administration spent the first four day of September seriously considering withdrawal from the FTA with Korea, but was dissuaded from doing so by Congress and industry groups.
The two sides will officially launch renegotiations following required procedures, such as holding public hearings and consultations with their respective legislatures. At the renegotiation table, Washington could demand restoring tariffs on Korean-made vehicles to reduce its deficit, which amounted to $23.25 billion last year, according to Korea’s ministry of trade, industry and energy.
The Korean automobile sector has been highlighted as one industry that benefited from the bilateral agreement due to tariff withdrawals.
If tariffs are restored, Korean carmakers - already squeezed by declining sales in China - could suffer.
Another sensitive area is agriculture. The U.S. could demand Korea widen its agricultural market for U.S. products while calling for the expansion of tariffs imposed on Korean products exported to the United States.
BY KANG JIN-KYU [firstname.lastname@example.org]
More in Economy
Number of part-time workers hits record high
Closing for good
Those who didn't buy are singing the real estate blues
Gov't to provide ￦30 trillion in trade financing for green, digital exports
Covid-19 pushes employment numbers down by 218,000 in 2020