South Korea rejects US request to revise trade agreement

[SEOUL] South Korea rejected a US proposal to revise a five-year-old trade deal as the Trump administration pushed for major changes it believes will address the trade imbalance between the two countries.

"The US asked for resolution of its trade imbalance, full implementation of the existing FTA, and modification and amendment of the current deal," South Korean Trade Minister Kim Hyun-chong told reporters in Seoul after speaking Tuesday with US Trade Representative Robert Lighthizer via video-conference, followed by talks with US officials in the South Korean capital.

"We told the US that it's necessary to figure out the reasons for the trade imbalance through a joint study to research, analyse and assess the effect of the FTA," Mr Kim said. "From my point of view, there's no agreement regarding negotiations" to revise the deal.

Following Mr Kim's remarks, Mr Lighthizer said President Donald Trump is seeking "substantial improvements" that address the trade imbalance, adding that the US wants to see the deal "fully implemented."

Too many American workers haven't benefited from the accord, and negotiations are an opportunity to address issues such as long-standing requests by the US that South Korea address "burdensome" rules that exclude US firms, Mr Lighthizer said in a statement.

No date was set for a future meeting on the issue, Mr Kim said. However, USTR said discussions will continue in coming weeks.

The agreement could be terminated if either nation said it wanted to do so. That process would take 180 days.

In June, Mr Trump told South Korean President Moon Jae-in that US automakers a should have a "fair shake" for better car sales. Mr Kim said last year that the deal was a "slam dunk-shot" for the US.

South Korea describes Korus as a mutually beneficial deal, basing its argument on a surge in bilateral trade volume. But the US sees it as one of the main reasons for the trade imbalance.

Mr Trump's push to revise the deal is part of his broader drive to reduce his nation's trade deficits with various nations, such as his pursuit of a full renegotiation of the North American Free Trade Agreement. Countries such as Japan that have large trade surpluses with the US are watching with interest.

The trade issue has emerged just as the US and South Korea need each other's support to fight together against North Korea's nuclear threat. Korus also helps the US on a strategic level as China's economic and political influence grows in the region.

South Korea is the US's seventh-largest trading partner, while the US is South Korea's second-biggest partner, after China. US figures indicate its goods deficit with South Korea was US$27.7 billion last year, or about US$4.4 billion more than the number Korea came up with.

BLOOMBERG