KORUS FTA negotiations likely to be partial revision rather than complete overhaul

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Hankyoreh | 19 December 2017

KORUS FTA negotiations likely to be partial revision rather than complete overhaul

By Cho Kye-wan

South Korea’s Office of the Minister for Trade expects that the negotiations to revise the South Korea-US Free Trade Agreement, known as the KORUS FTA, will not be a complete overhaul but rather a partial revision, called a “small package.” It also predicted that the US might ask for additional liberalization of agriculture and livestock as a way of putting pressure on South Korean negotiators.

“Our understanding [at the moment] is that the US is planning to engage in the negotiations using a ‘small package’ approach rather than a complete revision that would review every chapter of the agreement, as in the NAFTA renegotiation that is currently underway. We’ve concluded that this kind of partial revision would be in our interest, too,” said South Korean Trade Minister Kim Hyun-chong on Dec. 18 while briefing the National Assembly’s Trade, Industry, Energy, SMEs and Startups Committee on the plan for negotiating revisions to the KORUS FTA.

Since the Trump administration has not yet taken steps to notify Congress of its intention to initiate negotiations to revise the KORUS FTA as required by the Trade Promotion Authority, Seoul has expected that Washington would only push for a partial revision, which can be immediately pursued in the talks on the authority of the president alone. But Kim added that “we cannot completely rule out the possibility of partial revisions by both countries evolving into a full-fledged revision while the negotiations are actually underway.”

While Kim acknowledged that the US is expected to ask for additional liberalization of the agriculture and livestock sectors, he added that this will probably be a negotiating strategy designed to pressure South Korean negotiators. “We have continued to communicate to the US that we will not allow further liberalization of agriculture, livestock and fisheries,” he said. He also added that easing the standards for activating safeguards on US beef imports, a demand of the domestic agro-livestock industry, is a “legitimate” way to protect the domestic market.

During the renegotiation of NAFTA, the US has been strongly pushing Mexico and Canada to accept a ban on currency manipulation and a requirement for US-made parts to be used in vehicles imported to the US market. But if the US also demands that such provisions be added to the KORUS FTA, Kim said, those “would be very difficult for us to accept.”

“The US has not yet asked for a provision requiring that US-made parts be used in South Korean automobiles imported to the US market. A clause banning currency manipulation would be very hard to accept, since that would enable countervailing duties [on domestic subsidies] to be imposed on all commercial products,” he said.

Kim explained that negotiators are “thinking of addressing” the investor-state dispute system, which is regarded one of the “toxic provisions” in the KORUS FTA. “If it’s necessary to fix that, we will review it carefully,” he said.

The goals of the negotiations are “promoting mutual reciprocity and balancing our interests,” Kim said. “We will make concessions when they are possible, but not in other cases.”

“In these negotiations, we will consider the interest of the country as a whole while maintaining a balance between our interests in specific domestic industries.”

Now that it has briefed the National Assembly, the Office of the Minister for Trade has concluded the domestic implementation process for initiating negotiations to revise the FTA. “After we discuss the schedule with the US, we’ll push to start the first round of negotiations at the end of this year or the beginning of the next one and to continue with further negotiations at an interval of three or four weeks,” the government said.

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source: Hankyoreh