South Korea’s think tank has predicted the nation’s export loss to reach $17 billion over the next five years if its bilateral free trade agreement (FTA) struck with the U.S. in 2012 is renegotiated. Such prediction comes after U.S. President Donald Trump called the pact “unacceptable” and would “renegotiate that deal or terminate it,” in his recent interview with Reuters.
The Korea Economic Research Institute (KERI) said Sunday in its report that the projection is based on two assumptions: The first one that the U.S. revives its tariffs on South Korean automobile, machinery and steel products, the second that the U.S. delays tariff concession for five years on automobiles, information and communication technology (ICT), electronics, petrochemical, steel, machinery and textile products from Korea.
The think tank said in its first assumption - in which U.S. imposes tariffs of 11.8 percent on automobiles, 9.9 percent on machineries and 8 percent on steels imported from Korea - after renegotiating the Korea-U.S. FTA, Korea will be hit with an export loss of $16.99 billion at the maximum and loss of jobs as many as 154,000 from 2017 to 2021.
The KERI’s second assumption - in which the U.S. delays tariff concession for five years on seven major fields - which would impose tariffs of 2.5 percent on automobiles, 0.01 percent ICT equipments, 0.6 percent petrochemicals, 4 percent steels, 0.8 percent machineries and 7 percent textiles, Korea’s export loss in the trade with the U.S. would amount to $6.6 billion for five years starting 2017. It would take away as many as 54,000 jobs during the period.
By Boo Jang-won
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