KORUS Amendments: Minor Adjustments Fixed What Trump Called "Horrible Trade Deal"

Jeffrey Schott and Euijin Jung ()
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Euijin Jung: Peterson Institute for International Economics

No PB18-22, Policy Briefs from Peterson Institute for International Economics

Abstract: The amended Korea-US Free Trade Agreement (KORUS FTA)—quickly negotiated and signed in September 2018—involves only limited changes to the original pact. Schott and Jung assess what was changed as a result of the negotiations and, importantly, what was left off the agenda. The revised deal rectifies problems with Korean implementation of KORUS obligations, revises Korean auto regulations, and extends US import protection for trucks but does not address agricultural issues or rules of origin for autos and parts. On balance, the modest revisions will restrict, not enlarge, bilateral trade. While it has reduced short-term trade friction between Seoul and Washington, the KORUS amendment has not resolved the Trump administration’s fundamental concerns about bilateral trade in autos and parts. Korea remains vulnerable to new US trade protection in that sector.

Date: 2018-11
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