President Trump made statements last week calling for the United States to possibly withdraw from its five-year-old free trade agreement with South Korea, but business leaders in both countries say that now is not the time for taking this type of action.
U.S. President Donald Trump made statements last week calling for the United States to possibly withdraw from its five-year-old free trade agreement with South Korea, but business leaders and politicians in both countries say that now is not time for taking this type of action.
The agreement, which entered into force in 2012, has resulted in “noteworthy benefits” for both U.S. and South Korean companies, and should not be canceled, said the American Chamber of Commerce in Korea.
“Termination of the agreement will have a severe damaging effect on the economy, and we are also concerned about a deterioration of the relationship between the U.S. and Korea, leading to anti-American sentiment,” the chamber said in a statement Monday. “The growth of American businesses operating in Korea will be negatively influenced in such a case.”
The chamber added that “the U.S.’s sizable service trade surplus with Korea along with jobs that agriculture, and manufacturing sectors in the U.S. may also be at risk. And lastly, now is the time to further solidify the U.S.–Korea alliance given the continued provocation from North Korea.”
The chamber pointed to U.S. Census Bureau data that showed U.S. exports of manufactured goods to South Korea increased 21.8 percent from January to June this year alone, and the trade deficit with South Korea is in decline. South Korea is now the United States’ seventh largest export market.
However, the trade group acknowledged that the U.S.-South Korea FTA has “not benefited everyone,” adding that “80 percent of the trade deficit the U.S. has with Korea is generated by the automobile sector.”
The chamber said it is open to amending or adjusting aspects of the agreement to “better cater to the changing business environments in both the U.S. and Korea.”
House Ways and Means Committee Chairman Kevin Brady, R-Texas, and Ranking Member Richard Neal, D-Mass., along with Senate Finance Committee Chairman Orrin Hatch, R-Utah, and Ranking Member Ron Wyden, D-Ore., told President Trump in a letter Monday that the U.S.-South Korea FTA (KORUS) was “negotiated under two presidents and approved by Congress” and “is a central element of that alliance” between the two countries.
“Our trade relationship can be enhanced and, because KORUS’s operation has presented frustrations for some important U.S. industries and stakeholders, we must press South Korea to improve its implementation and compliance. To be effective and constructive, however, we must not withdraw from the agreement while we do so,” the lawmakers said.
Industry, lawmakers urge Trump to leave S. Korea FTA intact
