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U.S.-Korea Trade Talks to Begin Jan. 5

Friday, December 29, 2017
Sandler, Travis & Rosenberg Trade Report

The U.S. and South Korea will hold their first talks on updating their bilateral free trade agreement Jan. 5 in Washington, D.C., and could hold subsequent rounds every three to four weeks, according to press reports. Korea’s trade ministry said earlier this month that the domestic procedures necessary to consider amending the KORUS agreement, including consultations with lawmakers and stakeholders, have been completed.

Trump administration officials have said they want to resolve outstanding issues with respect to KORUS implementation and secure revisions that will lead to fair, reciprocal trade. Korean officials have said that while the agreement could be strengthened they see no need for substantial revisions because it has generated mutually beneficial outcomes in terms of trade, investment, and employment.

No details have yet been made available on the specific changes the two sides might seek. The U.S. has placed a priority on reducing its trade deficit with Korea, which it says has more than doubled since KORUS took effect in 2012, and particularly in the automotive sector, which in 2016 accounted for nearly 90 percent of the total deficit of $27.6 billion. Other U.S. goals could include accelerating Korea’s elimination of tariffs on U.S. agricultural products, which could be a non-starter for Seoul, and expanding market access for U.S. services.

According to a Yonhap News Agency article, Korea’s trade ministry said topics of discussion are expected to include goods and services, investment protection, and rules of origin. The ministry added that it will “propose our demands equivalent to the U.S. calls and push for decreasing the scope of the renegotiations.”

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