Trump mulling withdrawal from Korea trade deal

Posted September 04, 2017

In an effort to create better trade deals for the USA a new report claims President Trump is preparing to withdraw from its Free Trade Agreement with South Korea.

The administration has been in talks to make adjustments to the trade agreement known as KORUS.

But Mr Trump, asked on Saturday whether he was talking with his advisers about the trade deal, said: "I am".

Trade Minister Kim Hyun-chong on August 22, after holding a special session with the United States Trade Representative Robert Lighthizer, said both sides have failed to reach an agreement and that the Korean team did not agree to the US proposals.

Trump's comments on Saturday came amid a standoff over North Korea's missile and nuclear tests.

"Now is not the time for Washington to pull out of the KORUS FTA because a rift between the allies is exactly what Pyongyang wants and it's being served to them on a silver platter", Ms Duyeon Kim, a visiting senior fellow at the Seoul-based Korean Peninsula Future Forum, said yesterday.

The US Chamber of Commerce said in an email to members that it and other business groups "have received multiple reports" that the Trump administration is prepared to notify South Korea of its intent to withdraw from KORUS tomorrow, and possibly sooner. "But we know that the USA has a strong will to revise the deal".

The largest United States business lobby urged member companies to have senior executives call the White House and other administration officials to tell them not to proceed, and to enlist Republican governors in the effort. Trump may be reviving his "America First" slogan that won him the presidential title by threatening to do away with free trade deals he claims have damaged US trade and jobs.

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South Korea is "thoroughly preparing for all possibilities and will closely monitor" the USA developments over the trade agreement, the ministry official said, according to Yonhap.

The idea of potentially withdrawing seems to have been prompted by the breakdown in negotiations between South Korean officials and the U.S. trade representative, Mr Robert Lighthizer, a USA official with knowledge of the situation said.

He pulled the United States out of the Trans-Pacific Partnership agreement during his first week in office and his administration is now in talks to rewrite the 23-year-old North American FTA.

The United States, Canada and Mexico formally launched talks last month on renegotiating NAFTA, and are holding a second round this week in Mexico City.

Trump's pressure on South Korea on trade also comes as the administration is considering whether to take broader action against foreign-made steel. The White House had no immediate response to that claim.

"It is unsafe to handle North Korea's nuclear agendas with economic matters with South Korea", said Yang. While $500-Million in Alabama goods go to South Korea each year, nearly $2-Billion in South Korea good are shopped here, much of it involving the Hyundai plant in Montgomery. The U.S. had a $17.6 billion trade gap with South Korea a year ago, wider than $7.7 billion in 2012.

The move would have a negative impact on the nation's agriculture industry, according to the Nebraska Republican, who has long had a strained relationship with the president. US beef sales to South Korea rose to $1.1 billion in 2016 from $582 million in 2012, making South Korea the second-largest export market for USA, according statistics from industry associations.

Some of Trump's top advisers - including National Economic Council Chairman Gary Cohn - have privately raised red flags about pulling out of the agreement.