First Ever Trade Renegotiation
Washington – The Coalition for a Prosperous America (CPA) congratulates the Trump Administration for concluding the first-ever renegotiation in US history of a trade agreement, the Korea-US Free Trade Agreement (KORUS).
Seoul agreed to double the number of US autos allowed into the South Korean market and to lift onerous customs and market access restrictions that have stymied US agricultural and industrial exports. South Korea also agreed to restrict steel exports by 30 percent to avoid becoming a tariff avoidance route for China.
“Foreign negotiators know we are serious about fixing trade,” said CPA Chair Dan DiMicco. “President Trump and Trade Ambassador Lighthizer warned that the US is ready to withdraw from trade agreements that do not benefit American workers, farmers, and ranchers. We’ve seen the president take bold action on steel and aluminum, and tackle China’s theft of intellectual property. The administration’s trade team has smartly used that credibility and leverage to now extract concessions from South Korea.”
Trump Fixes One-Way Street
The United States maintains the world largest and most affluent consumer market. South Korea is one of a number of countries that has enjoyed open access to US consumers while erecting barriers to its own markets. As a result, the KORUS agreement ratified in 2012 simply boosted America’s goods trade deficit with South Korea from $13 billion in 2011 to $25 billion by 2014.
CPA Approves Of The Strategy
Michael Stumo, CEO of the CPA said, “President Trump and Trade Ambassador Lighthizer are shifting to a nimble, strategic approach on trade. Countries like South Korea have frustrated the intent of trade deals through a combination of industrial policy, currency devaluation, and non-tariff barriers. At the same time, the unilateral disarmament trade policy of previous administrations was a failure that caused the agricultural and industrial trade problems we face today. Our manufacturing, agricultural, and labor members look forward to the administration continuing to develop a responsive and strategic trade approach. Ultimately the US needs to adopt a cohesive strategy on domestic industrial and agricultural policy, tariffs, and exchange rate management to win the global competition for good jobs.”
High Trade Deficit
Stumo adds that America’s international trade deficit remains troublingly high, and reached $568 billion in 2017. However, this trade deficit means America has less to lose in withdrawing from failed trade deals than countries with trade surpluses.
The CPA will continue to encourage the president to use such leverage when looking to achieve better trade outcomes in negotiations with Canada, Mexico, and China.