Countering Commerce Secretary, Korean Ambassador Says US Exports Have Grown 'Significantly' Under KORUS
South Korean Ambassador to the U.S. Ahn Ho-young on Sept. 11 said U.S. exports to his country have increased significantly since the U.S.-Korea Free Trade Agreement took effect in 2012, days after Commerce Secretary Wilbur Ross said U.S. exports to South Korea have “arguably gone down” slightly. Trade tensions between the two nations have recently intensified, after President Donald Trump earlier this month indicated to White House reporters, and media outlets reported it, that he was considering canceling the deal (see 1709050033). U.S. and South Korean officials have continued engagement on KORUS since an Aug. 22 joint meeting failed to resolve U.S. concerns about the deal (see 1708220013), Ahn said during a Washington International Trade Association event. After the joint meeting, U.S. Trade Representative Robert Lighthizer cited the U.S. trade deficit with the nation, South Korea’s approach to intellectual property, and South Korean regulations seen by the Trump administration as protectionist (see 1708220013).
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“When it comes to trade in goods, over the past few years, U.S. exports to Korea have increased significantly, and the market share of U.S. goods in Korea has jumped” to 5 percent, Ahn said. “At the same time, Korean exports to the U.S. market also increased, increased more than U.S. exports. That is the reason why, in comparison with five years ago, the trade deficit increased for the U.S., specifically.” Census data shows that U.S. exports to South Korea decreased by $1.2 billion between 2011, the last full year before KORUS took effect, and 2016. But the data also indicate that the U.S. is on pace to export $1.7 billion more to the nation in 2017 than it did in 2011.
“Our exports to South Korea have not gone up,” Ross said during a Sept. 8 event hosted by The Washington Post (see 1709080033). “We actually have arguably gone down a little bit, whereas their exports to us, particularly of automobiles, have gone up a lot. And that’s why the trade deficit has gotten so big.” Ahn also pointed to the South Korean auto market as the main catalyst for the South Korean export increase, but also noted that exports spiked during 2012-2015 before plateauing in 2016, even though the U.S. maintained the same tariff rates on those autos since KORUS entered into effect in March 2012. Implementation issues, as opposed to substantive issues, have arisen at times since KORUS took effect, Ahn said.
South Korea hopes to undertake a second KORUS meeting with the U.S., but a date hasn’t been set yet, Ahn told reporters after the event. He expressed optimism that Lighthizer and his agency would follow through on their stated intentions to have meaningful dialog, and added that, “for the time being, I don’t think there’s any reason why you should be questioning this intention.” Also unclear is whether bilateral negotiations will be smaller- or larger-scale, but the Trump administration hasn’t requested congressional consultations required before the U.S. enters into major trade negotiations, Ahn said. “So, let’s see.”