Under KORUS, South Korean textiles and apparel, travel goods and footwear qualify for duty-free access to the US market

Under KORUS, South Korean textiles and apparel, travel goods and footwear qualify for duty-free access to the US market

The US has said it is still focused on "amending or modifying" its Free Trade Agreement with Korea (KORUS) in a way that will benefit American workers and businesses, even though Korea has refused to renegotiate its terms.

A special session of discussions was held via video conference yesterday between USTR Ambassador Robert Lighthizer and South Korean Trade Minister Kim Hyung-chong, following requests from the US for "possible amendments and modifications" to KORUS.

The US says since KORUS went into effect, its trade deficit in goods with Korea has doubled from US$13.2bn to $27.6bn.

"This is quite different from what the previous administration sold to the American people when it urged approval of this agreement. We can and must do better," said Lighthizer last month.

Korea to defend free trade pact in upcoming US meeting 

However, yesterday 's meeting saw Seoul decline the request to renegotiate the agreement without first looking at what is causing the trade imbalance. 

Kim instead proposed a joint study with Washington to evaluate the impact of the five-year-old bilateral trade deal and the cause of the US trade deficit. 

"We did not agree to the unilateral proposal from the US to amend the Korea-US FTA," Kim is reported to have said in a press briefing following the meeting. "We made our position clear that investigation, analysis and evaluation of the impact of the Korea-US FTA must be preceded."

Under KORUS, South Korean textiles and apparel, travel goods and footwear qualify for duty-free access to the US market. However, textiles and apparel account for a small and decreasing portion of US manufactured imports from the country, largely due to surging US apparel imports from China. Indeed, the value of US apparel imports from South Korea in 2016 totalled just $251m, within which $192m were under the FTA (or 76% FTA utilisation rate). 

Lighthizer today (23 August) said the US will continue discussions with South Korea on the matter as "too many American workers have not benefited from the agreement."

"The United States and Korea have an important economic relationship. Unfortunately, too many American workers have not benefited from the agreement. USTR has long pressed the Korean government to address burdensome regulations which often exclude US firms or artificially set prices for American intellectual property. This negotiation offers us an opportunity to resolve these and other barriers.

"Since KORUS entered into effect, US goods exports have decreased while the trade deficit overall with Korea has nearly tripled. American service exports have seen virtually no growth in the past four years. President Trump is committed to substantial improvements in the Korean agreement that address the trade imbalance and ensure that the deal is fully implemented."