The Trump administration secured a new trade deal with South Korea boosting America's auto exports and limiting imports of South Korean steel.
Seoul on Monday announced a deal to limit exports to the USA of South Korean steel, while extending high us tariffs on any possible South Korean pickup trucks and increasing USA automakers' access to the Korean market. The agreement will include a side letter, which needs more transparency from South Korea regarding its foreign exchange interventions along with commitment to keep from won devaluations for competitive intentions.
The currency deal, final details of which are still being negotiated between the U.S. Treasury and South Korea's Ministry of Strategy and Finance, is considered a "side letter" that will not be enforceable with trade sanctions.
South Korean President Moon Jae-In (R) shakes hands with U.S. President Donald Trump (L) during the joint press conference at the presidential Blue House on November 7, 2017 in Seoul, South Korea.
"It's also about the US penetrating South Korea's automobile markets". Trade in autos has been especially lopsided: South Korea a year ago exported to the United States 929,000 passenger vehicles worth $15.7 billion.
The United States says South Korea has used nontariff barriers, such as rigorous customs inspections, to block USA products. Comparing the fifth year of the FTA to the year before it went into effect, US poultry producers have faced a 78 percent collapse of exports to Korea - a loss of 82,000 metric tons of poultry exports to Korea.
South Korea previously subjected US cars to addition testing and environmental standards, but now will align those tests with USA standards.
USA auto manufacturers, however, have not been able to hit the current quota. American automakers have urged the Trump administration to push for a ban on such interventions to curb the influx of low-cost South Korean cars. "It is especially important that these tariff rate reductions are maintained, because the other major pork and beef suppliers to Korea also have free trade agreements with similar market access terms". The United States is the largest supplier of beef to Korea and trails only the European Union as the second-largest pork supplier.
Details of the deal were communicated to reporters in a Tuesday evening phone briefing. Korea has also agreed to limit the amount of steel it exports to the U.S. We're less than enthusiastic about these restrictions, which restrain competition and could harm American companies that need steel for their business and consumers who use products that contain steel, which is just about everyone.
'What will be the same for any country that is out from under the 232 tariff, like with Korea, there will be a hard quota, ' the official added.
Seoul agreed to include American pharmaceutical manufacturers in its national health program's premium reimbursement plan.
While U.S. carmakers will be able to ship 50,000 cars to South Korea annually, 25,000 more than before, without being subject to domestic safety regulations no American auto brand sold more than 10,000 vehicles in South Korea past year.
The United States and South Korea have reached an agreement to overhaul the 6-year-old U.S. -Korea Free Trade Agreement, senior administration officials said Tuesday, confirming an announcement earlier in Seoul.
During the meeting, Kim committed to denuclearisation in Korea if the United States and the South showed "goodwill", it was reported, with China agreeing to support its neighbor if nuclear tensions could be eased.
KORUS is shorthand for the Korea-US free trade agreement that went into effect in 2012.