White House had actually drafted a notice early this month of scrapping the five-year-old free trade agreement between the U.S. and South Korea, South Korea`s trade minister Kim Hyun-chong told reporters Wednesday.
Kim made the remarks during a news conference in Washington, where he stayed to attend a second round of talks next Wednesday over the U.S. request to amend the bilateral trade pact.
Kim said the Trump administration’s threat to scrap the deal is real and could be realized in the future, adding the U.S. is likely to continue using the threat of termination as leverage as the two sides discuss how to move forward on the deal.
“In light of such possibility, the South Korean government will devise ways to effectively block the U.S. threat while thoroughly preparing for discussions on revising the deal,” he emphasized.
The Trump administration has blamed the KORUS FTA for the U.S.`s growing deficit in trade with South Korea. U.S. President Donald Trump had floated the idea of scrapping the FTA earlier this month, but the overall mood swiftly changed after North Korea conducted its sixth nuclear test.
Kim said he will stick to Seoul’s position that the U.S. will lose more without the agreement. South Korea has called for a joint study of the FTA impact on the two economies before revising the deal.
The U.S. could yield more in talks over the pact in the face of North Korea`s nuclear threat, he said, adding “The South Korea-U.S. alliance is equally strategically important to the U.S.”
He said the automotive sector will be the main area where the U.S. is expected to push hard its position in future talks. “However, the U.S. trade deficit in the automotive sector is not correlated with the FTA because Korean car exports to the U.S. increased before the FTA and decreased after tariff removal four years later,” he said.
By Lee Jin-myung
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