by Justin Sink and Andrew Mayeda
President Donald Trump said he has finished negotiating a new trade deal with South Korea and may sign it at the United Nations General Assembly that starts this month.
“The deal is done,” Trump told reporters at the White House on Wednesday. “It’s been done with South Korea for a long time. It’s been done for about two months. We’ll do a ceremonial signing over the next very short period of time.”
The U.S. and South Korea agreed in March to revise their 2012 free-trade agreement, known as KORUS. But they still haven’t signed it into law, and South Korean lawmakers have warned that the nation’s parliament won’t pass it if the Trump administration slaps tariffs on Korean cars as part of his threat to protect domestic automakers from global imports.
In revising KORUS, Trump didn’t invoke the so-called fast-track authority for negotiating major overhauls to trade agreements that lets U.S. lawmakers have a simple yes-or-no vote. However, the administration has said it will hold consultations with Congress over KORUS.
The changes negotiated by the Trump administration were mostly cosmetic, said Wendy Cutler, who served as chief U.S. negotiator of the original deal with South Korea.
“It just underscores how modest the improvements are,” Cutler said by phone. “It looks like a pretty classic negotiation where they built on previous agreements” while the U.S. was “responsive to some of Korea’s concerns and then put on a bow on it.”
Under the revamped KORUS deal, Seoul agreed to double to 50,000 the number of cars each U.S. automaker can sell in Korea without meeting local safety standards. The two sides also agreed the U.S. wouldn’t reimpose tariffs on Korean cars, though America did extend its 25 percent levy on truck imports until 2041, from 2021 previously.
Cars from South Korea, which currently face no U.S. tariffs, were the biggest source of the nation’s $18 billion trade surplus with the U.S. last year, according to the Korea International Trade Association. The imbalance was one reason the U.S. demanded that Seoul lower non-tariff barriers to imports of U.S. vehicles in the revised agreement.
Trump in May ordered his Commerce Department to investigate whether global auto imports undermine national security, using the same law that he employed to justify steel and aluminum tariffs imposed earlier this year. The law gives the president wide latitude to impose tariffs on goods that imperil U.S. security.
To contact the editors responsible for this story: Alex Wayne at email@example.com Randall Woods, Sarah McGregor
© 2018 Bloomberg L.P