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US CEOs Call For Korean FTA Compromise

by Mike Godfrey, Tax-News.com, Washington

05 February 2018


An association of US CEOs has stressed the importance for their businesses of access to the preferential terms of the US-South Korea free trade agreement.

The US and Korea signed the United States-Korea free trade agreement (KORUS FTA) on June 30, 2007, and it entered into force on March 15, 2012.

In July 2017, at the request of President Trump, the US Trade Representative initiated negotiations with Korea with a view to updating the agreement, including to "address the significant trade imbalance [in favor of Korean exporters] and to resolve market access problems in Korea for US exports."

Most recently, US and Korean officials met in Seoul on January 31 to February 1 to resume negotiations on the agreement.

Businesses are concerned that the US could potentially terminate the deal if changes cannot be agreed.

Ahead of those talks, the Business Roundtable, a national organization of CEOs of companies with a combined annual turnover of USD7 trillion, called on the agreement to be updated rather than disbanded.

Tom Linebarger, Chair of the Business Roundtable International Engagement Committee, said: "With the US exporting approximately USD65bn in goods and services to South Korea that support 360,000 American jobs, we urge the Trump Administration to focus on strengthening and improving KORUS. In addition, during times of uncertainty on the Korean Peninsula, this agreement is critical to maintaining an important national security relationship with a key ally. In these negotiations, we encourage both governments to address implementation issues under KORUS and market access issues faced by US companies."

Korea is currently the sixth-largest trading partner of the US, with total trade amounting to USD144.6bn in 2016.

In the latest round of meetings, the US emphasized the steps needed to rebalance the FTA in particular in relation to trade in automobiles and parts. The US also pressed for the resolution of "implementation concerns," stating these have hindered growth in US goods and services exports and opportunities in Korea.

"These negotiations are an example of the Trump Administration's commitment to making trade deals fair and reciprocal," stated US Trade Representative Robert Lighthizer. "We must build on these negotiations with substantive and expeditious progress that will benefit the American people. In every trade relationship, the United States will stand up for US workers and manufacturers, especially those facing serious injury or harm by unfair trade practices."

TAGS: business | law | employees | tariffs | trade disputes | Korea, South | United States | trade | services

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