Daily Management Review

The Story Behind The Race By South Korea To Fix Trade Deal With The U.S.


03/31/2018




Just ahead of the much talked about negotiations on nuclear disarmament with North Korea, officials from South Korea strived and worked hard to get a deal through with their close ally the United States. The officials reportedly braved snowy weather, survived on instant noodles to save on time and hopped from one hotel to another in in Washington to get the deal through.
 
The talks between the two countries was first scheduled to last for just one week as South Korean officials went to the U.S. But the trip lasted for over four weeks as dozens of Seoul officials worked to end the talks successfully and as fast as possible to rejig the six-year-old U.S.-Korea Free Trade Agreement known as KORUS, reported the media quoting sources with direct knowledge of the matter.
 
The trade negotiations were hurried by U.S. decision to impose hefty tariffs on import of steel and aluminum earlier in the month. The 25 per cent import tariff on steel would hurt South Korea because the country is the third-largest steel exporter of the metal to the United States. Additionally, at a time when both the U.S. and South Korea required to cooperate with each other to contain a nuclear-armed North Korea, the Asian nation could not afford a prolonged trade dispute with its most important ally.
 
“This had to work well,” a senior official at South Korea’s presidential Blue House told news agency Reuters. “It was right to settle this as soon as possible because if this remains ahead of inter-Korean talks and U.S.-North Korea talks, it could unnecessarily complicate our relationship.”
 
It was about a year4 ago that U.S. president Donald Trump had termed the trade deal to be a ‘horrible’ one. However, after the deal was confirmed Trump initially said the new deal to be a “great deal for American and Korean workers”, signaling a marked change in attitude.
 
It is expected that Trump will meet the North Korean leader Kim Jong Un sometime in May following a summit meeting between the two Koreas in April – the first in over a decade. Denuclearization is expected to be the primary agenda of both the talks.
 
The issue of trade agenda had been raised by the South Korean President Moon Jae-in whenever there was telephonic discussion with Trump over North Korea, according to media reports.
 
It is reported that Moon asked Trump to take a “keen interest” in the trade negotiations and strive to get the trade agreement ready before their meetings with North Korea on March 16, at the same time when the representatives of the two countries were busy with the third round of trade talks.
 
It was around that time that a glimmer of hope to save the trade pact was viewed by South Korean negotiators. The trade agreement had resulted in the doubling of trade deficit that U.S. had with South Korea since 2012.
 
“The negotiations started to make progress around March 17, and that’s why our trade team decided to stay longer because they thought agreement was finally within reach,” reported the media quoting a South Korean senior trade ministry official.
 
“We mostly lived off on instant noodles and quick seaweed rice wraps bought from Korean supermarkets to save time,” the official said.
 
These efforts resulted in the two countries agreeing on a redone trade pact which was announced earlier this week according to which, American car makers and pharma companies would gain greater access to the South Korean market.
 
(Source:www.reuters.com)






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