On March 28, the Office of the U.S. Trade Representative (USTR) announced “substantial improvements” had been made in the renegotiation of the U.S.-Korea Free Trade Agreement (KORUS). The 2012 free trade agreement been under renegotiations since July 2017.
“The United States and Korea have strengthened an important economic relationship by agreeing to substantial improvements to KORUS that will help rebalance our trade, reduce our trade deficit, and expand U.S. export opportunities,” said U.S. Trade Representative Robert Lighthizer in the office’s official announcement of the move.
The described agreements involve automotive trade, vehicle-related standards recognition between the two countries, and pharmaceutical pricing rules. Nothing of the announced “improvements” in the KORUS discussion involved agriculture.
Based on the USTR’s announcement, the renegotiation process has not been completed. Despite this, the USTR touted these changes as “a good deal for U.S. workers and businesses” and predicted they would reduce the U.S. trade deficit.
Later in the day, U.S. Secretary of Agriculture Sonny Perdue praised the move despite it not directly involving agricultural products.
“Korea has long been an important trading partner for U.S. agriculture and currently ranks as our sixth-highest value market. U.S. agricultural exports to the country have increased 95 percent over the past decade and we look forward to continued growth. Through this new agreement in principle, progress was also made with regard to Korea’s customs verification procedures, which have been a substantial concern related to exports of U.S. agricultural and industrial goods.”
According to the U.S. Meat Export Federation, South Korea was the U.S. beef industry’s third largest export customer by volume and second largest by value in 2017. South Korea’s imports of U.S. beef muscle cuts and variety meats have been growing rapidly in recent years.
Due to KORUS, the U.S. had a 5-percentage point tariff advantage over competitor Australia in 2017. — WLJ
