Trump may put trade deal with South Korea on hold

President Donald Trump told construction workers in Ohio on Thursday that the US is "moving along very nicely with North Korea. We'll see what happens. Certainly the rhetoric has calmed down just a little bit".
President Donald Trump told construction workers in Ohio on Thursday that the US is "moving along very nicely with North Korea. We'll see what happens. Certainly the rhetoric has calmed down just a little bit".PHOTO: BLOOMBERG

US President says he wants agreement on denuclearisation with North Korea first

RICHFIELD (Ohio) • US President Donald Trump has said he may hold up a trade agreement reached this week with South Korea until after a deal is reached with North Korea on denuclearisation.

"I may hold it up until after a deal is made with North Korea," Mr Trump said in a speech on Thursday. "You know why? Because it's a very strong card. And I want to make sure everyone is treated fairly," he added.

Senior US officials have expressed concerns privately that Seoul is the weak link in the US-Japan-South Korea alliance and could be too quick to seal a deal with North Korea.

Mr Trump this month accepted an invitation to meet North Korean leader Kim Jong Un. South Korean officials have said the meeting would take place by end-May, after a North-South summit in April.

"We're moving along very nicely with North Korea. We'll see what happens. Certainly the rhetoric has calmed down just a little bit," Mr Trump told construction workers in Ohio.

The US and South Korea earlier this week agreed to revise their six-year-old free trade agreement with a side deal to deter competitive currency devaluation by Seoul and more access for American automakers and drug makers to the South Korean market.

The deal also lifts the threat of a 25 per cent US tariff on imports of steel from South Korea in exchange for quotas that will effectively cut US imports of Korean steel by about 30 per cent. Without the agreement in place, the tariffs would take effect on May 1.

 
 

STRONG CARD

I may hold it up until after a deal is made with North Korea. You know why? Because it's a very strong card. And I want to make sure everyone is treated fairly.

US PRESIDENT DONALD TRUMP

A statement by US Trade Minister Robert Lighthizer and South Korean Trade Minister Hyun Chong Kim described steel terms as being agreed, with the Korus free-trade deal changes as an"agreement in principle on the general terms" while details are still being finalised.

The US Treasury and the South Korean Ministry of Strategy and Finance are finalising the currency terms, they said.

PUZZLED

We're trying to grasp the genuine intent behind President Trump's remarks. We regard the renegotiation of the free-trade agreement as having already been completed smoothly.

MR PAIK UN GYU, South Korean Minister of Trade, Industry and Energy.

The trade deal changes, which preserve the US-South Korean trading relationship at a critical time for Seoul, do not need congressional approval but are subject to a 60-day consultation period with Seoul.

The White House said the two sides had reached a "great new Korus agreement in principle" and it was up to Mr Trump to decide when to finalise it.

"The President, taking into account all relevant considerations - including negotiations with North Korea - will determine the best time to sign a finalised agreement on behalf of the United States," said principal deputy press secretary Raj Shah.

In South Korea, meanwhile, officials were confused by Mr Trump's remarks.

"We're trying to grasp the genuine intent behind President Trump's remarks," South Korea's Minister of Trade, Industry and Energy Paik Un Gyu said yesterday.

"We regard the renegotiation of the free-trade agreement as having already been completed smoothly."

The ministry had made a request to the US side, said a senior ministry official who declined to identified.

"In terms of the negotiation schedule, we would have to review terms legally and finalise a draft... Both South Korea and the United States have their own domestic procedures, so we're not at a signing stage because those procedures take time," the official said.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on March 31, 2018, with the headline 'Trump may put trade deal with S. Korea on hold'. Print Edition | Subscribe