US President Donald Trump on Tuesday demanded a “free, fair, and reciprocal” trade deal with security ally South Korea, calling their existing agreement “quite unsuccessful and not very good for the United States” on a visit to Seoul.
Trump has slammed the five-year-old US-Korea free trade agreement (FTA), known as KORUS, as a “horrible deal” and a “job killer.” And he has threatened to pull out of KORUS – which could push the South closer into the economic orbit of China, already its biggest trading partner.
Washington has initiated talks to revise the agreement, but they show no sign of progress.
“Currently we are looking at ways of improving our economic relationship,” Trump said after a meeting with his South Korean counterpart Moon Jae-In. “I feel confident we’ll be able to reach a free, fair and reciprocal trade deal.”
The current agreement “quite frankly has been quite unsuccessful and not very good for the United States,” he said.
Moon said the two leaders reaffirmed that economic cooperation and sustainable trade were an “important pillar” of their alliance and they had agreed to “expedite talks” on the issue.
The US trade deficit with the South has more than doubled since the pact took effect in 2012, from US$13.2 billion in 2011 to US$27.6 billion last year, according to US data.
But the American Chamber of Commerce in Korea (AMCHAM), the biggest foreign business group in South Korea, said in September that it supported the deal, warning withdrawing from the pact will have a “severe damaging effect on the economy” and lead to a “deterioration” of ties between the allies.
Trump is pushing to cut his nation’s trade deficits with a number of countries, but AMCHAM said US exports to South Korea rose more than 20% in the first half of this year.
“It appears that the trade deficit is declining,” it said, adding that the automobile sector accounted for 80% of the deficit.