Source: Business Korea
The Donald Trump administration of the US will continue to renegotiate the North American Free Trade Agreement (NAFTA) and to make an improvement to the Korea-US Free Trade Agreement (FTA), the White House said on February 28 (local time).
The White House put out this announcement, clarifying five policies in “Annual Report about President Trump's Policy Agendas and Free, Fair and Reciprocal Trade.”
President Trump who began to put trade pressure this year, recently stated that the Korea-US FTA was a "disaster" and even hinted at abolishing the agreement. Taking the fact into consideration, the expression of “making an improvement” means that the level has been somewhat lowered.
"We are considering several measures including import quotas and tariffs with respect to sanctions on import steel and aluminum submitted by the US Department of Commerce," the White House said. Regarding safeguards on Korean-made washers and solar panels that took effect last month, "President Trump tried to make sure that foreign companies such as Samsung and LG should feel a sense of responsibility regarding production in the US," the White House added.
In the meantime, US treasury secretary Steven Mnuchin said that high-level talks on the resumption of the Trans-Pacific Partnership (TPP) began on February 27 (local time). It was the first time that the United States announced a discussion on rejoining the TPP led by Japan.
"Mr. Trump may reconsider rejoining the TPP," secretary Munuchin said, referring to the high-level talks on the TPP at an investment seminar hosted by the American Chamber of Commerce. This means that although secretary Munuchin implied that the US might rejoin the TPP for the sake of the US even though he said, “The issue is not a priority now.”
Korea is currently suffering a great deal from unprecedented and intense trade pressure from US President Trump. In this situation, there is growing concern that if a discussion about a trade alliance in Asia centered on the United States and Japan makes rapid progress, Korea may be left out in the global trade order. The TPP currently led by Japan does not include Korea. This is because the Korean government was reluctant to participate in the TPP due to the existence of the Korea-US Free Trade Agreement (FTA).
The US Trade Representative (USTR) said in a report about the Trump Administration’s trade policy agenda submitted to the US Congress on February 28 that mentioning the fact that the US withdrew from the TPP last year, the US had FTAs with six out of eleven countries participating in the TPP and wanted to push ahead with FTAs with five countries -- Japan, Vietnam, Malaysia, New Zealand and Brunei. The USTR also clearly stated in the report that the US will build closer trade ties with Japan, referring to a meeting between President Trump and Japanese Prime Minister Shinzo Abe.
The Trump government, on the other hand, is continuing to step up trade offensives against China and Korea. The trade policy report also maintained a negative evaluation of the Korea-US FTA which is under renegotiation. The report pointed out that US profits from the Korea-US FTA were below expectations and the US’s trade performances were also disappointing after the FTA took effect. After the Korea-US FTA, an increase in US exports to Korea was a mere smidgen compared to a spike in Korea's exports to the United States, the report emphasized.