South Korea agrees to amend trade deal with US

Legislation | | MIC Customs Solutions |

South Korea has agreed to amend its trade deal with the US following negotiations.

The US has succeeded in convincing South Korea to make formal amendments to the existing free trade agreement (FTA) between the two countries.

Following a second special session of the Korea-US (KORUS) FTA joint committee, representatives from South Korea have agreed to move ahead with discussions on how the trade pact could be updated to make it more mutually acceptable.

KORUS has been under the microscope since the election of Donald Trump as US president, with the Republican adopting a protectionist approach to international trade that has involved sharp criticism of numerous trade deals agreed by his predecessors.

The Trump administration has singled out KORUS as one of the main targets of critique, pointing to figures that show the US exported less to South Korea in 2016 than it did before the agreement was signed in 2011. As such, it is seeking to amend the deal to address the growing trade deficit, with the prospect of pulling out of the FTA entirely cited as a fallback option.

An initial round of talks on this matter were held in August, but ended without a consensus being reached, as South Korea proved unwilling to renegotiate the deal and instead recommended a new study to assess KORUS' economic impact.

US trade representative Robert Lighthizer said: "I now look forward to intensified engagement with Korea in an expeditious manner to resolve outstanding implementation issues, as well as to engage soon on amendments that will lead to fair, reciprocal trade."

It is expected that discussions over the narrowing trade gap will focus heavily on the auto industry, while South Korea could also be asked to accelerate the reduction of agricultural tariffs, which is currently set to take place gradually over the next decade.