The differences in trade between the United States and South Korea have been settled through a agreement on trade.
A new version of the trade agreement that had existed between the countries over the last six years was developed and agreed upon, said the South Korean government on Monday.
A partial exemption from the steel and aluminum import tariffs imposed by the U.S. has also been secured by South Korea.
The existing trade deal between the U.S and South Korea had been at the receiving end from U.S. president Donald Trump who had termed it to be “horrible” and had even threatened to pull out of it altogether. Such comments and assumptions by the U.S. president had created waves of fear on both sides as people feared that ultimately this trade deal could cause a rift between the U.S. and one of its closest friends on the Asian continent. South Korea is also the sixth biggest trading partner of the U.S
And now, after nearly three-month of deliberations to renegotiate some of the key points in the deal, an agreement has been reached between the two countries to continue with the trade deal that is also known as Korus.
Krystal Tan, an Asia economist at research firm Capital Economics said that South Korea apparently seems not have lost any ground on the deal despite the shar criticisms from Trump about the unfairness of the deal.
“The concessions that Korea has agreed to will have a very small impact on its economy,” she wrote in a note to clients.
A far greater access to the South Korean market would be available for U.S. auto companies according to the redesigned deal. Every year, many more cars are allowed to be imported into the U.S from South Korea and that alone contributes significantly to the annual trade deficit between the countries of almost $23 billion.
“On the whole, this is a good result,” said Troy Stangarone, a senior director at the Korea Economic Institute of America.
While South Korea managed to retain its position of not having to open up its agricultural sector to imports from the U.S., it was crucial for the U.S. to make some gains for its automakers, he said.
In 2017, it has been reported in some quarters, based on US government figures, that U.S. managed to export cars to South Korea worth only about $1.5 billion where as it imported South Korean passenger cars worth nearly $16 billion.
Under the rehashed agreement, the number of U.S. cars that would be allowed into South Korea as imports has been doubled to 50,000 vehicles annually for each automaker, said South Korea’s Trade Ministry on Monday. The cars would however have too meet U.S. safety standards. However, South Korean safety regulations have to be met by U.S car makers beyond that number for import in to South Korea.
Tan of Capital Economics said that the rejig “will make little practical difference, at least in the short term,” and noted that “no US automaker sold more than 11,000 vehicles in Korea last year.”
(Adapted from Money.CNN.com)