21 July 2017
USTR to Analyse Performance of U.S. FTAs, Will Seek Revisions to Deal with South Korea
USTR and the U.S. Department of Commerce are seeking input by 31 July that will be considered as part of the comprehensive performance reviews they are conducting of U.S. trade agreements. These reviews will help guide U.S. trade policy and trade negotiations and could lead to the renegotiation or termination of existing agreements or rules.
Comments should relate to the performance of (i) individual free trade agreements and bi-lateral investment treaties to which the United States is a party, (ii) the WTO agreements with regard to trade relations with those economies with which the United States does not have an FTA but does run significant goods trade deficits (i.e., mainland China, the European Union, India, Indonesia, Japan, Malaysia, Switzerland, Taiwan, Thailand and Vietnam), and (iii) U.S. trade preference programmes. Specific topics may include the following.
- violations or abuses of these agreements, treaties or programmes, or unfair treatment by trade and investment partners, that have harmed U.S. workers, manufacturers, farmers or ranchers; harmed intellectual property rights held by U.S. companies and U.S. persons; reduced the rate of innovation in the United States; or impaired research and development from occurring in the United States
- the extent to which these agreements, treaties or programmes have not met predictions with regard to new jobs created, favourable effects on the trade balance, expanded market access, lowered trade barriers or increased U.S. exports
- benefits or opportunities created as part of these agreements, treaties or programmes with respect to export opportunities for U.S. workers, manufacturers, farmers or ranchers; lowered trade barriers; promotion of U.S. IPR holders; the rate of innovation in the United States; U.S.-based research and development; the protection of rights of U.S. persons investing abroad; and any other relevant information
At the same time, the Trump administration is reportedly moving to launch a process to revise the U.S.-Korea FTA, although details on when talks may begin and the administration’s objectives remain unclear. Following a recent meeting with Korean President Moon Jae-in at the White House, President Trump said the KORUS agreement has been “a rough deal” for the United States, noting that the U.S. trade deficit with South Korea has doubled since the FTA took effect in 2012. Trump said the United States will address this situation by revamping the agreement, which “will be much different and will be good for both parties.”
While Trump said the United States is “renegotiating [KORUS] right now as we speak,” administration officials later clarified that Trump is directing U.S. Trade Representative Robert Lighthizer to request the first-ever special session of a joint committee provided for under the FTA to “start the process of renegotiating and amending the deal.” South Korea apparently cannot decline such a request and the meeting would have to be conducted within 30 days. Moon asserted that the agreement has been “mutually beneficial” to date but said “if there are ways that it has gotten out of kilter we will address it.”
Although there have so far been few details on what changes the U.S. plans to seek, during his conversation with Moon, Trump focused on increasing U.S. exports of automobiles to South Korea and curbing its “export of dumped steel” to the U.S. market. Commerce Secretary Wilbur Ross explained that the “largest single component” of the U.S. trade deficit with South Korea “is automotive trade,” where South Korea allows in “only 25,000 cars per Big Three manufacturer … based on U.S. standards” and requires any additional vehicles to comply with South Korean standards. Ross also said that South Korean exports of oil country tubular goods to the United States are being made with “dumped Chinese steel.”