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 looks forward to "intensified engagement" with Korea to resolve outstanding implementation issues regarding its Free Trade Agreement with Korea (KORUS) in a way that will lead to fair, reciprocal trade.

A special session of discussions was held at the offices of the US Trade Representative in Washington, DC earlier this week between US Trade Representative Robert Lighthizer and South Korean Trade Minister Kim Hyun-chong.

The meeting followed an earlier session on 22 August in Seoul, which came after requests from the US for "possible amendments and modifications" to KORUS.

The US says since KORUS went into effect in March 2012, its trade deficit in goods with Korea has doubled from US$13.2bn to $27.6bn.

During the first session, Seoul declined 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. 

South Korea declines trade pact renegotiation with US

Now, following the conclusion of the second special session, Lighthizer says the two sides will "engage soon" on further discussions.

"I initiated Joint Committee discussions at the direction of the President to improve outcomes under this agreement for all Americans," he said. "I now look forward to intensified engagement with Korea in an expeditious manner to resolve outstanding implementation issues as well as to engage soon on amendments that will lead to fair, reciprocal trade."

Customs and international trade law firm Sandler, Travis & Rosenberg, notes that while it does not appear the Seoul-proposed study has been completed, a statement from the Korean trade ministry on 4 October said "both sides now share an understanding of the need to amend the agreement to further strengthen its mutual benefits." The Ministry said it would begin the domestic procedures necessary to make such amendments, including consultations with lawmakers and stakeholders.

According to the firm's Trade Report, published today (6 October), the Ministry said it would "begin the domestic procedures necessary to make such amendments, including consultations with lawmakers and stakeholders".

While no details have yet been made available on the specific changes the two sides might seek, Sandler, Travis & Rosenberg adds there are some indications. "The US has placed a priority on reducing its trade deficit with Korea, which it says has more than doubled since KORUS took effect in 2012, and particularly in the automotive sector, which in 2016 accounted for nearly 90% of the total deficit of $27.6bn."

Meanwhile, a USTR press release notes that US services exports to Korea stalled between 2013 and 2016, another issue the US may seek to resolve in the forthcoming negotiations, says the firm.