[Editorial] Seoul should respond wisely to US calls to amend KORUS FTA

Posted on : 2017-04-19 16:42 KST Modified on : 2017-04-19 16:42 KST
US Vice President Mike Pence speaks before the American Chamber of Commerce in Korea
US Vice President Mike Pence speaks before the American Chamber of Commerce in Korea

US Vice President Mike Pence said on Apr. 18 that the US would be pursuing an amendment of its free trade agreement with South Korea (KORUS FTA). Pence who arrived in South Korea on Apr. 16, said in a speech before the American Chamber of Commerce in Korea (AMCHAM) that “the U.S. trade deficit with South Korea has more than doubled since the KORUS came into effect,” adding that the US would “work . . . to reform the KORUS in the days ahead.”

While it marked the first time a senior US official had stated plans to amend the FTA since the Donald Trump administration took office, it was also something many saw coming. Since his presidential campaign, Trump has repeated called for renegotiation of the KORUS FTA, which he has accused of killing US jobs. It’s part of an “America first” approach focused wholly on US interests.

Pence didn’t offer any specifics on when or how the FTA would be amended. Seoul is taking this as a sign that the US doesn‘t intend to start pushing the reform right now. In particular, the government is sighing in relief over the reference to a comparatively milder “reform” instead of “renegotiation.”

Seeing Seoul’s response to the FTA issue, we can’t escape the impression that it’s behaving too defensively. In other words, its response needs to be more proactive. To begin with, it is far from the case that only the US has suffered from the KORUS FTA. It is true that South Korea’s trade surplus with the US doubled from US$11.6 billion in 2011 to US$23.3 billion in 2016. But for the balance in services, the US’s surplus rose from US$10.9 billion to US$14.1 billion. At the same time, a more than 60% rise in South Korean investment in the US since the FTA has contributed in a big way to creating American jobs. The damage done to South Korea‘s agriculture and livestock industries also can’t be ignored. The production base for livestock farms is now facing the threat of collapse after the beef market was opened wide to reach a deal on the KORUS FTA. US product has taken over first place in the imported beef market, with a market share of close to 50% this year. Imports of US fruits like oranges, cherries, and lemons are rising fast.

South Korea shouldn‘t overreact to the US’s protective trade onslaught. What Seoul needs to do is marshal objective evidence and data to refute the US’s farfetched claims and convince it of the merits of our position. The Trump administration, for its part, shouldn’t forget that agreements between countries must be rooted in the principle of reciprocity. Both sides should be benefiting - and any attempt to push the interests of just one of them is only going to lead to wasteful conflict and confusion.

Please direct questions or comments to [english@hani.co.kr]

button that move to original korean article (클릭시 원문으로 이동하는 버튼)

Most viewed articles