Trump’s comments have upset South Korea’s stock market which has plummeted despite brightening economic prospects.
U.S. President Donald Trump has threatened he will either renegotiate or terminate on what he termed as a “horrible” free trade deal with South Korea, saying Seoul should pay for the U.S. anti-missile system his administration has deployed in South Korea in the wake of North Korea threatening war on the U.S.
Terming the five-year-old trade pact with South Korea as “unacceptable” Trump said the pact will come up for renegotiation after his administration completely revamp the North American Free Trade Agreement (NAFTA) with Mexico and Canada.
While squarely placing the blame on Hillary Clinton, who as secretary of state in 2011 had promoted the final version of the U.S.-Korean trade deal, known as KORUS, when it got approved by the Congress.
“It is unacceptable, it is a horrible deal made by Hillary,” said Trump. “It’s a horrible deal, and we are going to renegotiate that deal or terminate it.”
When asked when he would announce his intention to renegotiate the deal, Trump said: “Very soon. I’m announcing it now.”
His comments have stunned South Korean financial markets which have plunged despite the brightening of economic outlook for the nation.
South Korea’s foreign ministry has stated it will continue to explain to the Trump administration the benefits of the free trade agreement (FTA) for both countries.
“Our government will keep monitoring the situation and continue our effort to explain to the United States the mutually reciprocal outcome of South Korea-U.S. FTA, while preparing for countermeasures,” said South Korea’s foreign ministry.
Incidentally, Washington has yet to officially file a request with Seoul to renegotiate the agreement.
“Talk and actual policy are different,” said a high-ranking official at South Korea’s ministry of finance, who spoke on the condition of anonymity since he is not authorized to speak to the media.
As per a former U.S. State Department official, the estimate for the anti-missile system deployed by the U.S in South Korea costs nearly $1.2 billion. He disclosed that the U.S. will not want to sell THAAD to Seoul.
“We want to retain THAAD in our arsenal, consistent with all other U.S. weapons systems deployed on the Korean peninsula. We own them. We retain them. We have the right to redeploy them,” said the official on condition of anonymity.