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U.S., South Korea: Leaders Sign Revised Free Trade Deal

2 MINS READSep 24, 2018 | 20:53 GMT

What Happened: U.S. President Trump and South Korean President Moon Jae In signed a revised version of the U.S.-Korea Free Trade Agreement (KORUS) on Sept. 24 at a ceremony in New York at the sidelines of the U.N. General Assembly, according to the White House's official website.

Why It Matters: The finalization of an agreement on KORUS marks a potential bright spot for U.S. allies and trade partners looking to avoid the fallout of U.S. protectionism. However, it is still unclear whether South Korea will gain an exemption from threatened U.S. tariffs on automobiles that would impact $2.1 billion worth of South Korean trade — a full 13 percent of its total exports. South Korea may offer to restrain its vehicle exports to the United States and accept a U.S. quota on South Korean vehicles, which would likely be possible for Seoul because of how many South Korean plants are currently operating in the United States.

Background: U.S. pressure on South Korea was part of broader efforts to reduce the United States' trade deficit and build up domestic manufacturing. But after negotiations, the two sides announced in March that they had reached an agreement in principle that would open up the South Korean market to more U.S. vehicle imports, ease South Korean vehicle standards for U.S. products and lift some restrictions on pharmaceuticals. The U.S. trade representative officially released the KORUS revision outcomes in early September.

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