Can the US Scrap Its Trade Deal With South Korea?

US and South Korea Trade Negotiators Meet In Seoul Next Week

South Korea and the U.S. on Tuesday began talks over a possible revision of their free trade agreement (FTA).

A one-day video-conference between U.S. Trade Representative Robert Lighthizer, South Korean Trade Minister Kim Hyun-chong and the trade pact's joint steering committee ended without a decision on the next steps for possible revisions. The countries' officials had held talks in Seoul, in which Washington hoped there would be discussions to amendments or modification of the free trade deal agreed to 5 years ago.

The trade minister said the US side had not brought up the possibility of terminating the trade pact during the talks, adding that South Korea would wait for the USA review of Tuesday's discussions and its proposals.

Kim added that during the joint committee meeting, Seoul's trade representatives presented their American counterparts with facts and figures regarding the mutual benefits of the FTA and made their stance clear that the Korean government remains adamant that the terms of the agreement remain unaltered.

Trade Minister Kim Hyung-chong said Seoul proposed a joint study with Washington to evaluate the impact of the 5-year-old bilateral trade deal and the cause of the US trade deficit.

"I think it's better that we maintain the agreement because it's a win-win", said Kim during his meeting with the Ministry of SMEs. The U.S. trade deficit with South Korea widened from $13.2 billion in 2011 to $27.6 billion a year ago. South Korea, however, considers the deal to be "mutually beneficial" and called for objective examinations of the agreement before any attempts to make changes. "We will continue to cooperate with the USA counterpart with an open mind", Kim added.

The trade issue has emerged just as the United States and South Korea need each other's support to fight North Korea's nuclear threat. The U.S. exported $1.6 billion worth of passenger cars last year to South Korea, up from $417 million five years earlier.

South Korea told the USA that the absence of tariffs let American vehicles surpass Japanese models to rank second in imported autos since 2015, according to a source with knowledge of the talks.

The Trump administration is seeking to renegotiate the trade deal with South Korea as part of its broader efforts to reduce the US trade deficit.

On steel, American officials say South Korea is partly to blame for the global glut that has caused prices to fall.

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