New US deal with South Korea: What you need to know
Mar 30 2018
-South Korea trade pact is the first major deal to result from President Donald Trump's diplomatic hardball strategy, suggesting that America will pursue more agreements on matters such as currency that previous administrations have avoided.
In addition, the United States has extended a 25 percent tariff on South Korean trucks through 2041.
The goal of the side deal will be to secure Seoul's commitment to avoid competitive devaluations of its currency and provide more transparency, such as when the nation's central bank intervenes in foreign-exchange markets.
The agreement also address Korean steel sold in the US and other hot-button trade issues. The U.S. Trade Representative's Office is the lead negotiator on revising the Korean trade agreement.
"It's also about the US penetrating South Korea's automobile markets".
In an interview with a government-backed website, South Korea's Minister for Trade Kim Hyun-chong said the quota on steel and the agreement to allow more US auto imports "removed the two biggest uncertainties through these negotiations".
US exports to Korea declined 7.8 percent ($3.7 billion) and imports from Korea increasing 13.1 percent ($8.1 billion) by the end of KORUS' fifth year. Comparing the fifth year of the FTA to the year before it went into effect, USA poultry producers have faced a 78 percent collapse of exports to Korea - a loss of 82,000 metric tons of poultry exports to Korea.
At the House Ways and Means hearing on March 21, Republicans and Democrats said they wanted more details about the South Korea negotiations.
The U.S. service sector trade surplus with Korea grew much slower since the FTA. The details of that agreement are not yet public, but it will not include an external arbitration mechanism, officials said.
South Korea also agreed to eliminate non-tariff barriers such as certain environmental testing requirements and recognize US standards on auto parts, according to the senior administration officials. The Treasury's October report urged Korea to 'to enhance the transparency of its exchange rate intervention'.
The United States this month began imposing the steel tariffs, saying imports jeopardized USA national security.
Trump with South Korean President Moon Jae-in during a trip to Asia last November.
In addition to allowing more cars, the deal imposes a limit of about 2.68 million tons of steel Korea can export to the U.S. That amount is equal to about 70% of the annual average Korean steel exports to the U.S. between 2015 and 2017.
The deal also includes a provision that will allow U.S. pharmaceutical companies to benefit from premium pricing for certain drugs sold in South Korea.
WASHINGTON-The Trump administration said March 27 it has widened US access to South Korea's vehicle market while providing American manufacturers protection from South Korean imports.
Dr. Jack Rasmus, a professor of economics at Saint Mary's College of California and author of "Central Bankers at the End of Their Ropes: Monetary Policy and the Coming Depression", told Radio Sputnik's Loud & Clear that US President Donald Trump is initiating a "trade offensive" with South Korea in order to set a precedent for renegotiating existing free trade agreements with European countries as well as nations that are part of the North American Free Trade Agreement (NAFTA). No local auto companies export pick-up trucks made in South Korea to the United States, according to Kim.
Trump's complaints about South Korean trade practices have caused friction between the two allies at a crucial time, as he prepares for a meeting with North Korea's reclusive leader, Kim Jong Un.