Post-KORUS imbalances are on the agenda.
A lot has been said about the Trump administration’s renegotiation of the North American Free Trade Agreement, and its Section 232 investigations into steel and aluminum imports. Both are big deals.
Less has been said about the bilateral trade agreement between the United States and South Korea – known as KORUS. At least for the next few days, though, that will change.
South Korean President Moon Jae-in is visiting Washington, D.C., where he and President Trump will meet for the first time on Thursday evening, and hold talks on Friday. They’re expected to talk about North Korea; a U.S.-backed missile defense system installed on the Korean peninsula that China doesn’t like; and the five-year-old KORUS deal. Trump, a loquacious man, was critical of the agreement on the campaign trail, and told reporters back in April he's still skeptical. The president at the time called the deal “a one-way street.”
Indeed, by some measures it has been. From Reuters:
The U.S. goods trade deficit with South Korea has more than doubled since KORUS took effect in 2012, from $13.2 billion in 2011 to $27.7 billion in 2016. It was forecast to boost U.S. exports by $10 billion a year, but they were $3 billion lower in 2016 than in 2011.
It looks like the Trump administration is gonna be tough on South Korean trade. It has signaled it plans to raise the American auto industry’s complaints about restrictive market access. To cite another specific example, it has already acted; the administration raised tariffs significantly on imports of certain South Korean steel products this year. Subsidized pipe (used by the energy industry for oil drilling), you will remember, flooded into the American market a few years ago, resulting in factory closures and thousands of U.S. layoffs.
According to reports, the president is planning for a “friendly and frank discussion” with President on trade.
President Moon, meanwhile, has brought with him promises to eradicate “unfair trade practices” and plans from South Korean manufacturing giant Samsung to open an appliance plant in South Carolina. It will ultimately employ 1,000 in the manufacture of washing machines.
That may help grease the skids on Friday’s meeting. We’ll be keeping an eye on President Trump’s opinions on South Korean trade over the next few days.