On Wednesday, United States Trade Representative Robert Lighthizer sent the Republic of Korea a letter calling for a meeting to discuss making modifications to the U.S.-Korea Free Trade Agreement (KORUS).
The meeting and following negotiations, according to Lighthizer, “…will provide an opportunity to review progress on the implementation of the agreement, resolve several problems regarding market access in Korea for U.S. exports, and, most importantly, address our significant trade imbalance.”
The U.S.-Korea FTA came into force in March 2012, and total trade between the two nations last year reached $144.6 billion, making South Korea the sixth largest trading partner for the U.S.
Looking at textiles and apparel specifically, the U.S. brought in $904 million worth of goods from South Korea in 2016, a drop of 3 percent over the previous year. As of May 2017, the U.S. had already taken in $887 million worth of textiles and apparel from South Korea.
The biggest thing the U.S. hopes to get out of renegotiating the trade agreement with South Korea is the same as what it hopes for all trade agreements currently getting a second look: to reduce the trade deficit. And that trade deficit, according to Lightizer, has ballooned from $13.2 billion to $27.6 billion since KORUS took effect.
“A key focus of the Trump Administration is on reducing our trade deficits with trading partners around the world, and we have real concerns about our significant trade imbalance with Korea,” Lighthizer wrote in the letter. “The United States has had a persistent goods deficit with Korea for nearly two decades. When the KORUS Agreement was negotiated, expectations were high that both of our economies would realize significant gains. However, our overall deficit with Korea has increased, and our goods deficit has doubled since the agreement entered into force. It is critical that we achieve real progress that fosters a truly fair and level playing field, and a more balanced trade relationship.”
According to the USTR, the meeting to discuss the U.S.-Korea FTA is slated for August and renegotiations will go forward from there.