Marathon effort to conclude pact: South Korean officials

The revised pact lifts the threat of a 25 per cent US tariff on South Korean steel in exchange for quotas that will cut imports.
The revised pact lifts the threat of a 25 per cent US tariff on South Korean steel in exchange for quotas that will cut imports.PHOTO: REUTERS

SEOUL • South Korean trade officials braved snowstorms, ate instant noodles to save time and spent weeks hotel-hopping in Washington as they raced to overcome major trade hurdles with the US ahead of high-stakes nuclear discussions with North Korea.

What was to meant be a week-long trip to Washington became a four-week marathon, as dozens of Seoul officials sought to wrap up talks aimed at amending the six-year-old US-Korea Free Trade Agreement known as Korus, said several South Korean officials with direct knowledge of the matter.

US plans announced earlier this month to impose hefty tariffs on steel and aluminium imports added urgency to the trade negotiations. As the third-largest steel exporter to the US, South Korea had a lot to lose from the 25 per cent tariffs.

Seoul also felt it could not afford a protracted trade dispute with its most important ally at a time when the two need to work together to contain a nuclear-armed North Korea, the officials told Reuters.

"This had to work well," said a senior official at South Korea's presidential Blue House.

"It was right to settle this as soon as possible because if this remains ahead of inter-Korean talks and US-North Korea talks, it could unnecessarily complicate our relationship."

US President Donald Trump is expected to meet North Korean leader Kim Jong Un in May after the two Koreas hold their first summit in more than a decade late next month. All parties are expected to discuss the denuclearisation of North Korea.

 
 

Whenever South Korean President Moon Jae In had a phone call with Mr Trump to discuss the North Korean nuclear issue in recent months, he also raised the trade agenda, said the Blue House official.

In their latest call, on March 16, while the two countries' trade representatives were holding a third round of trade talks in Washington, Mr Moon asked Mr Trump to have a "keen interest" in the matter and work towards a speedy trade agreement before their respective summit meetings with Mr Kim.

Around that time, South Korean negotiators began to see some hope that they could save the trade pact, which has seen the US goods trade deficit with South Korea double since it took effect in 2012.

"The negotiations started to make progress around March 17, and that's why our trade team decided to stay longer because they thought the agreement was finally within reach," said a South Korean senior Trade Ministry official.

The official and another trade official said nearly 30 South Korean negotiators had to move hotels repeatedly in Washington when their trip took longer than expected, at times finding themselves crammed into a hotel room to work on their negotiation strategy for the next day.

"We mostly lived on instant noodles and quick seaweed rice wraps bought from Korean supermarkets to save time," the official said.

The efforts culminated in a revised pact announced this week, giving US automakers and pharmaceuticals more access to the South Korean market. It also lifted the threat of a 25 per cent US tariff on South Korean steel in exchange for quotas that will cut imports of Korean steel by about 30 per cent.

The talks did not have a good start as the US "kept asking us to make concessions unilaterally", South Korean Trade Minister Kim Hyun Chong said in an interview broadcast live on the Blue House Facebook account on Thursday.

"When we first met to talk, the mood was as cold as Siberia and our meeting only lasted for 21 minutes," Mr Kim said of his meeting with US Trade Representative Robert Lighthizer.

"Later on, we got closer and our relations developed to something like a bromance."

Mr Trump initially welcomed the breakthrough as a "great deal for American and Korean workers", a marked turnaround from a year ago when he said he would either renegotiate or scrap what he called a "horrible" trade deal.

But on Thursday, Mr Trump said he may hold up signing it until after an agreement is reached with North Korea on denuclearisation, saying such a deal was "a very strong card" to ensure fairness on the new trade pact.

REUTERS

A version of this article appeared in the print edition of The Straits Times on March 31, 2018, with the headline 'Marathon effort to conclude pact: S. Korean officials'. Print Edition | Subscribe