AmCham forum addresses KORUS FTA hits, misses after 5 years

Commemorating the fifth anniversary of the Korea-US Free Trade Agreement on Wednesday, members of the American Chamber of Commerce in Korea and the Korea International Trade Association held a joint seminar at Coex in Seoul, discussing the future prospects of the deal.

The seminar, organized by US and Korean business organizations, was designed to express a unified message to the governments and business communities of both countries, organizers said.

Forum speakers delved into topics such as the original intention of the agreement, how negotiation and implementation affected its initial aims, as well as what the future has in store for the agreement, considering US President Donald Trump and his “America First” policy. 

“Five years ago, KORUS FTA came into effect. It has been a remarkable five-year period,” said Jeffrey Jones, chairman of the Partners for Future Foundation. “If we look at the statistics -- we can prove anything we want with statistics, good or bad or indifferent -- but there is a lot of good (with KORUS). One of which is the creation of 45,000 jobs in manufacturing in America by a Korean foreign direct investment.

“That is amazing. I hope Mr. Trump is listening, that is a good number,” he added.

Jones, however, also added that despite the benefits reaped by both nations thanks to the FTA, there are still issues that need to be addressed. Reading off a statement by the US Trade Representative earlier this month, the chairman reiterated the Trump administration’s concerns that the US is not reaping equal benefits from the agreement.

A representative from the USTR stated that the free trade agreement with South Korea – the largest trade deal implemented during the Obama administration -- coincided with a dramatic increase in the US’ trade deficit with Korea, adding that the total value of US goods exported to South Korea fell by $1.2 billion.

Jay Kim, formerly Korea’s chief negotiator for KORUS FTA, and Wendy Cutler, former US chief negotiator for KORUA FTA, also took part in the forum to discuss the years of negotiation hurdles that occurred in order to establish and implement the deal. They both referred to it as a hard-fought mutually beneficial trade agreement. 

“KORUS is the highest standard free trade agreement the US has ever enforced,” said Cutler. “It’s not perfect, but it’s a gold standard agreement.”

Cutler added that the new Trump administration should not judge the success of the KORUS FTA based on trade deficit alone.

“My advice to the new administration, with respect to these trade agreements at large or existing trade agreements, is don’t reach a conclusion on whether they’re successful or not based on whether we have a trade deficit with the country,” she said.

“I don’t think trade deficits are an accurate measure of whether an agreement is working or not … in the case of Korea and the US, I think the growing trade deficit since KORUS came into effect has more to do with different levels of economic growth than anything related to the trade agreement.”

By Julie Jackson (juliejackson@heraldcorp.com)