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USTR requests special session on U.S.-Korea free trade agreement

Industry News, News | July 13, 2017 | By:

On July 12, United States Trade Representative Robert Lighthizer, as directed by President Trump, formally notified the Republic of Korea that the United States is calling a special Joint Committee meeting under the U.S.-Korea Free Trade Agreement (KORUS) to start the process of negotiating to remove barriers to U.S. trade and consider needed amendments to the agreement. The USTR acted in accord with the President’s intention of reducing the trade deficit and giving Americans a better chance to succeed in global markets.

The term “renegotiation” has sparked concern in the business community and among sources on Capitol Hill, who have said that Korea is not interested in a renegotiation. (The U.S. and Korea, under Article 22.2, have amended the agreement several times, but the process of making those changes was not called a renegotiation.)

Possible complications

Seoul has not yet appointed a new trade minister. KORUS Article 22.2. states that the joint committee can be co-chaired by the USTR and the Minister for Trade of Korea, “or their respective designees.” On July 3, the day the Trump administration confirmed it was seeking a special session meeting in the near future, South Korean President Moon-Jae tapped Paik Un-gyu, an engineering expert, to serve as minister of trade, industry and energy.

New ministers do not need Korean parliamentary approval, but they are required to undergo parliamentary confirmation hearings, and Korean lawmakers must pass a government reorganization bill before Paik and other cabinet members can be appointed. The special session of Korea’s national assembly ends on July 18, and sources said it was unlikely that Korean lawmakers could pass the required bill by then.

During President Moon’s visit to Washington on June 30, President Trump told reporters the two sides were renegotiating the agreement “right now” and that he was seeking cooperation on autos and steel. Moon, appearing with Trump, did not mention trade or KORUS but touted what he viewed as the agreement’s mutually beneficial nature ahead of a bilateral meeting earlier that day.

House Ways & Means Chairman Kevin Brady (R-TX) and trade subcommittee chairman Dave Reichert (R-WA) issued statements contending that KORUS has been successful but acknowledging that the deal, like any other, could be modernized and improved. However, any official renegotiation outside the existing KORUS text would likely mean the administration would have to adhere to Trade Promotion Authority timelines and rules, and would require a congressional vote, which could complicate the process.

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