Korea becomes first nation to form trade consultative body with U.S.

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Korea becomes first nation to form trade consultative body with U.S.

Published: 04 Mar. 2025, 18:35 Updated: 04 Mar. 2025, 19:06

JIN EUN-SOO
[email protected]

Audio report: written by reporters, read by AI

Minister of Trade, Industry and Energy Ahn Duk-geun, left, and U.S. Commerce Secretary Howard Lutnick shake hands at the U.S. Department of Commerce in Washington on Feb. 27. [MINISTRY OF TRADE, INDUSTRY AND ENERGY]

Korea became the first nation to form a trade consultative body with the United States, underscoring the significance of the two allies' cooperation on shipbuilding, energy and tariff measures.

Minister of Trade, Industry and Energy Ahn Duk-geun said in a media briefing that Seoul had become the first government to establish such a consultative body with Washington amid scrambling effort from other trade partners in line to address looming trade challenges in a briefing Tuesday, where he discussed developments from trade talks with U.S. Commerce Secretary Howard Lutnick that took place in Washington last week.

“Korea was first to set up a consultative body with the U.S., and it is probably the greatest achievement we have made during this trip,” Ahn said to reporters Tuesday.

“Setting up a communication channel is critical because although it is something that should be certainly done, from our perspective, it is a burden for the U.S. because it has to set up similar frameworks with numerous countries. We are going to use this channel to explain how Korea has invested in the U.S. in the past and how we are going to do it in the future as well.”

The Industry Minister also noted that the latest talk had served as an opportunity to clarify that Korea no longer functions as an alternative trade route for China, which was the case during the first Donald Trump administration.

“Under the Joe Biden administration, the U.S. became the first investment destination for Korea, especially in the advanced industry sector. We explained that the current economic situation is significantly different from what it was like in Trump's first term.”

The newly established consultative body will address five areas — shipbuilding, energy, the Alaska liquefied natural gas (LNG) project, tariffs and nontariff barriers — while engaging with the U.S. Department of Commerce, U.S. Trade Representative (USTR) and National Energy Council.

In Korea, the Industry Ministry will take the lead while cooperating with other departments such as the Ministry of Economy and Finance, Ministry of National Defense and Ministry of Foreign Affairs.

The minister expects the consultative body to kick off as early as next week.

At the meeting last week, the commerce secretary said “thank you” when Ahn said Korea's shipbuilders were willing to assist the United States in building maintenance, repair and overhaul facilities, icebreakers and LNG tanks, which are currently in high demand.

“The U.S. is already aware that Korean shipbuilders have backlog spanning multiple years. But despite that situation, we expressed our willingness to support the U.S. through the consultative body and work programs, and Lutnick appreciated our commitment,” Ahn said.

With Korea considering diversifying its energy sources by expanding LNG imports from the United States, Ahn said such plans will serve as valuable negotiating tools when talking tariffs with the United States.

“Since the U.S. is seeing trade deficit as key indicator, importing energy from the U.S. will serve as a very useful card,” he said. “We are mulling several options, such as expanding the long-term contract volume signed for this year or shifting some imports from China to the U.S.”

In terms of yet-to-be-paid subsidies for Korean chipmakers that have announced hefty investments to build chip plants in the United States, Ahn said it is important for Korean companies to fulfill certain requirements stated in the contract to receive the promised subsidies. He added the government will continue to request policy consistency from the U.S. government, making sure the agreed-upon subsidies remain intact.

Acting President Choi Sang-mok, center, speaks during a Cabinet meeting at the government complex in central Seoul on March 4. [JOINT PRESS CORPS]

Acting President Choi Sang-mok also expressed expectations for the consultative body's formation while calling for a bipartisan effort to address mounting trade uncertainty.

“Recent events are a sobering reminder of the global world order, where there is neither a permanent ally nor a permanent enemy,” said Choi, citing the ongoing tariff war triggered by Trump.

“We have to face the reality that we won’t be able to fully safeguard our national security, industry or technological capabilities by depending on the good will of stronger allies.”

BY JIN EUN-SOO, SHIN HA-NEE [[email protected]]