Trade Ministry close to renegotiating U.S. FTA

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Trade Ministry close to renegotiating U.S. FTA

The Ministry of Trade, Industry and Energy will aim to submit a plan for renegotiating the Korea-U.S. free trade agreement to the National Assembly by Dec. 18, the last procedural step on Seoul’s end to begin formal talks with Washington on the trade deal.

The ministry’s announcement on Tuesday came a day after the trade minister, Kim Hyun-chong, presided over a meeting with other government officials to prepare for renegotiation of the free trade pact. The Trump administration has demanded a revisit of the document, citing trade deficits with Korea.

On the U.S. end, the Trump administration is required to notify Congress of its intention to renegotiate the deal at least 90 days before the formal opening of talks. It is also mandated to disclose what it intends to achieve from the renegotiation.

When the Trump administration began the process of renegotiating the North American Free Trade Agreement, the U.S. trade representative, Robert Lighthizer, notified Congress on May 18, and the first round of official talks began on Aug. 16.

But if the Trump administration only wants to make revisions to the Korean trade deal, it can do so without notifying Congress.

Trump appeared to take a softer stance on the issue during a visit to Seoul last month, apparently satisfied with the sale of weapons to Korea worth billions of dollars. This led to speculation that Washington might opt for a revision instead of total overhaul.

Still, Washington could demand restoring tariffs on Korean-made vehicles.

The Korean auto industry has been highlighted as one sector that benefited from lifted tariffs. If they are restored, Korean carmakers, already squeezed by declining sales in China, could suffer.

Another sensitive area is agriculture. The United States could demand Korea further open its agricultural market to U.S. products and call for the expansion of tariffs imposed on Korean products exported to the United States.

For the first 11 months of this year, Korea’s trade surplus with the United States stood at $17 billion, down 21.6 percent from $21.69 billion in the same period last year, according to Korea’s Trade Ministry.

Last year, Korea saw its trade surplus with the United States more than double to $23.25 billion in from $11.64 billion in 2011, the year before the free trade agreement went into force.

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