Korea may face continued U.S. trade pressureKorea may face continued U.S. trade pressure despite the amendment to a bilateral free trade deal and the recent settlement of a row over steel imports, experts said Friday.
In late March, Korea and the United States revised their free trade agreement (FTA), with Seoul agreeing to open its auto market to the U.S. in exchange for an exemption on steel tariffs.
Washington formally exempted Korea from steep tariffs on steel on April 30, saying the move was in line with national security interests.
U.S. President Donald Trump earlier announced a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from all countries in principle, citing the need to protect the nation from what his administration called a threat to national security.
“The conclusion of the negotiations on the FTA revision and steel doesn’t mean that Seoul’s trade conflict with the Trump administration is over,” Yang Jun-seok, an economics professor at the Catholic University of Korea, told a seminar in Seoul.
The seminar was hosted by the Korea International Trade Association, the Korea Institute for International Economic Policy (KIEP) and two private organizations.
Yang said Korea may remain vulnerable to U.S. antidumping and safeguard investigations requested by American businesses, despite taking less damage from safeguard measures from the U.S. government.
“The Trump administration’s trade policy is characterized by lack of consistency, as well as disregard for economic data and the logic of national interests,” he said. “There is always a possibility that Trump may challenge other issues.”
Yang advised Korea to sell the benefits of trade to the American people and band together with other countries to take limited retaliatory steps against the United States should it try to toughen its trade barriers.
Choi Nak-gyoon, a senior KIEP researcher, argued that Korea’s conclusion of its FTA negotiations with the United States has helped eliminate uncertainty hanging over Asia’s fourth-largest economy.
“Yet Korea has to come up with effective responses to trade remedies, nurture related experts and establish a national system to deal with future trade disputes,” Choi said.
Touching on trade ties with China, Choi said Korean companies have gained a fresh foothold in the world’s No. 2 economy following Beijing’s withdrawal of retaliatory measures against Korea for the deployment of an advanced U.S. missile defense system here and the start of talks on the expansion of a bilateral FTA.
“It is necessary to map out measures to head off China’s future retaliation and ensure the effective opening of the Chinese market,” he stressed.
In March last year, China took a set of retaliatory measures against Seoul, including a ban on group tours, following the installation of a Terminal High Altitude Area Defense (Thaad) battery in southeastern Korea. In November, Seoul and Beijing agreed to put their bilateral ties back on track, setting aside their bitter row over the installation of the advanced missile battery.
In late March this year, the two nations began the first round of talks to expand the scope of the bilateral free trade deal to better cover the service and investment sectors and increase business opportunities for both sides. The two nations implemented the FTA, which is focused on lowering tariffs on goods, in December 2015.