Seoul hopes to avoid steel tariffs

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Seoul hopes to avoid steel tariffs

Korea’s trade minister on Monday raised cautious hopes for getting an exemption from the United States over proposed tariffs on Korean steel products, as negotiators engage in last-minute lobbying to minimize the impact on the local industry.

Paik Un-gyu, minister of trade, industry and energy, said Korea has been negotiating with U.S. officials through multiple channels to earn a reprieve from the 25 percent steel duties, which are set to go into effect on March 23.

Korean Trade Minister Kim Hyun-chong has been in Washington to have closed meetings with U.S. Trade Representative Robert Lighthizer and other policymakers to get Seoul exempted from the planned duties. Yoo Myung-hee, who led the third round of talks to amend the free trade agreement with the U.S. last week, extended her stay this week to assist his efforts.

“I think there will be a good result this week if we wait for the results [of negotiations],” Paik told reporters in Seoul. “Although the U.S. views [Korea] as an ally, there are concerns over the global oversupply of steel and we are working hard on that part.”

Korea sold 3.6 million tons of steel products to the U.S. last year, making it the No. 3 steel exporter following Canada and Brazil, according to the Department of Commerce.

Despite the military and economic alliance with the United States, Korea is in a more difficult situation than other nations due to its high volume of steel imports from China, which is blamed for flooding the global market with cheap products.

Korean officials have said they will make it clear that the country has been reducing its steel production to address the global supply glut and is not serving as a back door for Chinese steel to reach U.S. markets.

In regard to concerns over rising pressure on the Korean side to give more to satisfy American negotiators in the trade talks, Paik said Seoul won’t make unilateral concessions to U.S. demands at the negotiating table.

In the past round of talks, the United States has called for enhancing market access to the Korean auto market and strengthening rules of origins.

Aside from outreach efforts for the country-specific exemptions, the Seoul government said it will work with steel exporters to help them get exclusions for their products from the list of tariffs. The U.S. Commerce Department will decide on exclusions for certain products that are not sufficiently produced in the United States, which could last up to 90 days.

The U.S. is Korea’s second-largest trading partner, with bilateral trade reaching $119.3 billion in 2017, according to government data.

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