Potential Issue: KORUS FTA Renegotiation Emerged as Hot Issue after Summit Meeting | BusinessKorea

Monday, November 20, 2017

South Korean President Moon Jae-in and U.S. President Donald Trump released a joint statement at the White House on June 30 (local time).
South Korean President Moon Jae-in and U.S. President Donald Trump released a joint statement at the White House on June 30 (local time).
SEOUL,KOREA
3 July 2017 - 11:15am
Jung Suk-yee

After the first summit meeting between South Korean President Moon Jae-in and U.S. President Donald Trump, the White House and the Blue House made different announcements on KORUS FTA renegotiation. The former mentioned the organization of a committee for renegotiation whereas the latter said that there was no agreement on renegotiation.

During their summit meeting, the two Presidents agreed with each other on the South Korean government’s approach to the North Korean nuclear issue, that is, simultaneous dialogue and sanctions and stepwise response for denuclearization following nuclear freeze. In their joint statement, the two Presidents stressed the importance and significance of the alliance between Washington and Seoul while mentioning nothing at all about the THAAD deployment issue.

When it comes to trade, pressure is likely to mount on South Korea. The U.S. President is a person who has labeled the KORUS FTA as a job killer and a horrible FTA. In their joint press announcement, he said that the trade deficit of his country has increased by at least US$11 billion since the implementation of the KORUS FTA and, as such, it is not a very good agreement. After the announcement, the White House said that President Donald Trump told the United States Trade Representative to organize a special committee to renegotiate and modify the KORUS FTA.

In contrast, the Blue House announced the same day that the two Presidents reached no agreement at all with regard to the matter although the South Korean President proposed joint analysis and evaluation of the economic effects of the deal. This means though the two sides shared the same view on the necessity of a channel for bilateral talks, the White House is regarding it as a tool for renegotiation, and the Blue House is regarding it as one for analysis, research, and assessment. If the U.S. government makes a request for renegotiation, South Korea has to comply with it because each free trade agreement is characterized by its renegotiation procedure being initiated every time any one of the singing parties expresses its will.

Their joint statement contained nothing about South Korea’s share in U.S. defense costs as well as the renegotiation issue. However, the U.S. President suddenly mentioned the matter in the joint press announcement that followed their summit meeting, signaling an intense war of nerves between the two governments. In addition, the U.S. President mentioned his country’s trade deficit with South Korea during the meeting, where South Korean enterprises promised to invest 40 trillion won in the United States.

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