Pence urges revision of Korea-US trade deal

U.S. Vice President Mike Pence / Yonhap

By Park Hyong-ki

Korea may have to prepare for some revisions to its free trade agreement (FTA) with the United States after U.S. Vice President Mike Pence said that Washington needs to “review and reform” the deal.

In a forum hosted by the American Chamber of Commerce in Korea (AMCHAM) in Seoul, Tuesday, Pence said American enterprises seeking to conduct and expand business here still face high barriers.

“Our businesses continue to face too many barriers of entry which tilt the playing field against American workers and American growth. We are reviewing all of our trade agreements across the world to ensure they benefit our economy as much as they benefit our trading partners,” Pence said.

He noted that the FTA has almost doubled the U.S. trade deficit since it took effect in 2012.

“The U.S. will pursue trade that is both free and fair, and reviews are done to ensure that they benefit our economies as much as they benefit our trading partners,” he said. “A stronger American economy means a stronger economy for South Korea, and for all of our trading partners.”

Pence said the two countries should review their trade relationship honestly.

“We know that you can help us level that playing field between our two countries and move toward a system that maximizes jobs and growth and a brighter future for the people of the U.S. and the people of South Korea. We will work toward that end to reform the KORUS (FTA) in the days ahead,” he said.

Pence noted that the Trump administration’s America First policy is to make its economy stronger by cutting corporate taxes and relaxing regulations.

“Under President Donald Trump, over-regulation days are over and there’s a new era of jobs, growth and prosperity in the United States of America. The truth is a stronger America means a stronger economy for South Korea and for all of our trading partners,” he said.

His remarks came after the U.S. Treasury released its foreign exchange report to Congress, Friday.

Korea was able to avoid being labeled a currency manipulator, but the country remained on the U.S. currency watch list because of Seoul’s “significant trade surplus with the U.S. and the undervalued won.”

The report said that Korea’s undervaluation has backed its large current account surplus.

“The Treasury urges Korea to enhance the flexibility of the exchange rate and will be closely monitoring Korea’s currency intervention practices,” it said.

Korea’s trade surplus with the U.S. stood at $11.6 billion in 2011, and increased to $23.2 billion last year.

Government officials here refrained from stretching the meaning of Pence’s reference to “review and reform,” saying that they do not necessarily mean that the two sides will renegotiate the deal.

The Ministry of Trade, Industry and Energy has constantly reiterated that it will prepare for all possibilities and will continue to watch the U.S. trade position.

Pence came to Seoul as part of his Asia-Pacific trip, and left for Japan Tuesday wrapping up a three-day visit here.

“We do not think what Vice President Pence said meant that the U.S. will immediately do something about the trade deal,” Ministry of Foreign Affairs spokesman Cho Joon-hyuk told the press.

Kim Seong-tae, a researcher at the Korea Development Institute agreed, saying, “Pence’s FTA review and reform do not mean full-fledged renegotiations.”

The Ministry of Trade, Industry and Energy has constantly reiterated that it will prepare for all possibilities and will continue to watch the U.S.’s position on trade.