Former Hyundai Research Institute CEO Ha Tae-hyung remarked at a recent seminar that revision of the KORUS FTA is likely to be rather limited and the South Korean government can add energy trade to the revision of the agreement.
His view is contrary to that of many others, who are considering that renegotiations or partial revision will do more harm than good to South Korea because the country will have to agree to an additional opening of the service market.
In making the remark, he focused on the fact that the Donald Trump administration is planning to make an investment of US$1 trillion for infrastructure renovation. According to the World Economic Forum, the level of U.S. social infrastructure is 5.94 on a scale of 1 to 7, lower than those of Japan (6.29), Switzerland (6.24), France (6.12) and Germany (6.06). The Donald Trump administration is likely to relax lots of regulations in the energy sector as well. “Assuming that the United States invests US$1 trillion in its public infrastructure, its imports from South Korea is estimated to increase US$2.5 billion for five years to come,” he continued to say, explaining that the U.S. manufacturing sector alone is not capable of supplying all the materials required for the new infrastructure construction.
He pointed out that South Korean companies can have a wider access to the U.S. infrastructure market by making use of renegotiations. “During the past five years, a new variable was given to the United States in the form of shale gas and the United States needs to export it,” he mentioned, adding, “Both South Korea and the U.S. can benefit from the addition of an energy trade chapter to the KORUS FTA because it will lead to shale gas export by the U.S. and energy infrastructure export by South Korea.”